Report: Huawei in Central and Eastern Europe, Trends and Forecast

Andreea Leonte | 5 January 2021

The CHOICE network (China Observers in Central and Eastern Europe), made up of Central and Eastern European experts on China, published in January 2021 the report Huawei in Central and Eastern Europe, Trends and Forecast.

This briefing paper is a short analysis of positions regarding Huawei of a number of CEE countries, including Romania. Andreea Leonte, researcher at RISAP, also participated  as an author of this briefing paper. 

The authors of the report are: Ivana Karásková, Alicja Bachulska, Tamás Matura, Una Aleksandra Bērziņa-Čerenkova, Konstantinas Andrijauskas, Andreea Leonte, Matej Šimalčík.

Romania: decisive opponent

Although Huawei has a large presence in Romania in the existing 3G and 4G networks, having close relations with most telecommunications operators, as well as a regional support center in Bucharest, its chances to lead the Romanian 5G rollout are extremely small. 

Romania has not yet organized the 5G tender, despite it being initially scheduled to take place last year. The tender was postponed for 2021, as the legislative framework detailing the obligations of future suppliers is still pending. The reason for the delay was that the Romanian government was waiting for the European Commission to enact measures concerning the security of 5G networks in the EU. 

Regarding 5G, Romania was the first country to sign a Memorandum of Understanding (MoU) with the US, on the occasion of a presidential visit to Washington by Klaus Iohannis, on August 20, 2019. The MoU provided for the rigorous evaluation of all future 5G vendors to determine if they have a transparent ownership structure and ethical corporate practices, as well as if they are subject to the control of a foreign government, outside an independent judicial review. Although this document did not explicitly exclude Huawei from supplying 5G equipment to Romanian telecommunication operators, the company could hardly meet the conditions named in the MoU. At the same time, the MoU should be interpreted in conjunction with the US Federal Register of Entities, which lists all entities believed to pose serious national security/foreign policy threats. Huawei was added to the list on May 15, 2020, together with other 114 of its overseas-related affiliates. Since Romania has pledged to have a close cooperation with the US on 5G security, the chances that Huawei could win the 5G bid are remote. 

After his visit to the White House, the Romanian president Iohannis discussed the MoU with Romania’s National Defense Council (CSAT) regarding how to transpose it into national law. A year later, on August 4, 2020, a first draft law was published on the website of the Ministry of Transport, Infrastructure and Telecommunications. 

The draft law states that all manufacturers of technologies, equipment and software programs, which are intended for the use in the national 5G networks (as well as in the information and communication infrastructures of national interest), should obtain an authorization, granted by decision of the prime minister. However, the authorization is conditioned by a favorable opinion from the CSAT, after performing a thorough assessment of the risks, threats and vulnerabilities to the national security and/or national defense of the equipment manufacturer. The authorization may be withdrawn following the same procedure. 

The draft law also mandates the National Communications Authority (ANCOM) to request detailed information about the technologies, equipment, and software used in 5G networks, as well as their manufacturer, the degree of outsourcing to third parties of certain activities related to the management of electronic communications networks provided. Failure to provide this information can result in heavy fines. Moreover, the law sets out measures for phasing out the technologies, equipment and software currently in use from noncompliant providers. 

On September 11, 2020, Huawei contested Romania’s new 5G security rules in a letter to Margrethe Vestager, the European Commission’s executive vice-president responsible for EU digital policies. The letter was sent by Huawei’s Belgian subsidiary, which argued that the new rules follow biased and ambiguous criteria, which are in violation of EU law. The CEO of Huawei Romania also opined that the law was introduced in public debate for too short a time, only between August 4 and 17, thus the telecom industry specialists could not assess its impact. The Commission, however, dismissed these allegations, noting that member states may adopt national cyber security rules through European telecoms legislation. 

In November 2020, Romania’s prime minister Ludovic Orban explicitly excluded a partnership with the company in an interview for Radio Europa Libera – a direct consequence of Romania’s strategic partnership with the US on security issues. We can, thus, conclude that Huawei’s prospects for participating in the construction of the 5G infrastructure in Romania are slim.

 

Disclaimer: The conclusions and recommendations included in the report do not necessarily represent the position of RISAP, which was not institutionally involved in this project.

Huawei in Central and Eastern Europe

Trends and Forecast

Photo Credits:  CHOICE

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Andreea Leonte

Andreea Leonte

Andreea Leonte is Fellow for China Studies at RISAP. A Mandarin speaker, Andreea’s research interests focus on China’s foreign relations, China-Europe relations, the Belt and Road Initiative and the China-CEE 16+1 format.

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