The European Union (EU) strengthened its stance on banning the use of 5G telecommunications equipment from China-based vendors like Huawei and ZTE and could restrict funds for member states that fail to implement a ban.

EU Commissioner Thierry Breton wrote in a statement that his office is now officially backing those member states that have moved to remove “high-risk suppliers” from their telecommunication networks. That backing is through “a communication confirming that the decisions taken by certain member states to restrict or exclude completely Huawei and ZTE from their 5G networks are justified and in line with the toolbox.”

That “toolbox” was introduced by the EU in early 2020. The extensive document explained that member states agreed to “strengthen security requirements, to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk including necessary exclusions for key assets considered as critical and sensitive — such as the core network functions — and to have strategies in place to ensure the diversification of vendors.”

However, it stopped short of directing member states to take specific measures to prevent high-risk vendors from participating in 5G build-outs. This was left to member states to decide.

Breton in his most recent statement said that only 10 of the 27 EU member states have officially moved to restrict or exclude high-risk vendors.

“This is too slow, and it poses a major security risk and exposes the union's collective security, since it creates a major dependency for the EU and serious vulnerabilities,” he wrote.

The EU Commission has now produced a second report for its 5G security toolbox that furthers its efforts. Breton also said the EU Commission would continue to work with member states that have not officially adopted the toolbox, and that the commission itself will implement the toolbox for its own procurement of telecoms services “to avoid exposure to Huawei and ZTE” and take into account the adoption of the toolbox when allocating EU funding.

“We have been able to reduce or eliminate our dependencies in other sectors such as energy in record time, when many thought it was impossible. The situation with 5G should be no different: we can't afford to maintain critical dependencies that could become a ‘weapon’ against our interests,” Breton wrote. “That would be too critical a vulnerability and too serious a risk to our common security. I therefore call on all EU member states and telecom operators to take the necessary measures without further delay.”

Huawei in a statement to SDxCentral said the EU Commission’s decision “is clearly not based on a verified, transparent, objective and technical assessment of 5G networks.”

“Huawei understands the European Commission’s concern to protect cybersecurity within the EU,” the statement notes. “However, restrictions or exclusions based on discriminatory judgments will pose serious economic and social risks. It would hamper innovation and distort the EU market.”

Shortly after the initial 5G toolbox release in 2020, European-based telecom giant Vodafone hinted at this economic impact, as well as the impact on the timing of its 5G deployment that limiting or banning Huawei radio access network (RAN) equipment from its network would have.

“RAN quotas, which will require us to swap out our modern 4G network, would disrupt our customers, could drive higher prices given the costs involved and, most importantly, would delay the roll out of 5G by two to five years given the industry’s limited operational and financial resources,” Nick Read, former CEO of Vodafone, said during an earnings call. “This would hold back individual member states and Europe’s global competitiveness in a digital society.”

Andy Purdy, chief security officer for Huawei, told SDxCentral in a recent interview that the vendor would continue to work with countries on maintaining access, specifically noting a recent move by the German government to consider banning 5G equipment from China-based vendors.

“The uncertainty about external pressures on customers and countries not to buy from us, we can’t do a lot about that directly,” Purdy said. “But one of the things we’ve done in working with Germany and the European Union, other countries in Asia and elsewhere is to try to continue the progress toward cybersecurity, privacy protection and the efforts to build on what’s been learned in the global community. Some of the movement toward zero trust, some of the emphasis on greater transparency for both cybersecurity and privacy and greater accountability.”

During the recent MWC Barcelona 2023 event, Huawei's CTO and president for its carrier business group, Paul Scanlan, attempted to counter the issue of trust that has become a rallying point for the company's fight against country bans.

“The best way to answer that question is you can ask the 741 customers — and not just trust Paul — and see whether they say they trust Huawei or they don’t trust Huawei,” Scanlan said.

He added that he had hosted meetings with a pair of customers that told him they were sorry they were pushed into this area, and that “we can’t buy your 5G. But we’re here with eight of our executives because we want to maintain the relationship, because we know we can trust you, because you’ve helped us deliver results.”

The EU Commission’s moves are similar to those by the U.S. government, which has prevented telecommunication providers from deploying any new equipment from select Chinese vendors and is also providing funds for those operators to replace already installed equipment.

These moves have proven somewhat beneficial for Huawei’s rivals.

Nokia President and CEO Pekka Lundmark recently touted that the vendor had around 30% market share across Europe at the end of the first quarter, but was gaining half of all new contracts tied to operators ripping out equipment from China-based vendors like Huawei and ZTE.

However, a recent Dell’Oro Group report on the global RAN market noted that Huawei remained the world’s largest RAN vendor, though it dropped to the No. 3 position when taking its home country out of the equation.