Europe has a 5G dilemma. As the United States and Asia race to develop the transformative digital technology, which will connect devices, objects, and machines faster and more efficiently, Europe has fallen behind.

The Chinese technology company Huawei seemed to offer a solution. A global 5G industry leader—testing in sixty-six countries with over 154 carriers—Huawei offered to build Europe’s 5G critical infrastructure for a competitive price.

But U.S. President Donald Trump’s administration has pushed allies to stop partnerships with the Chinese tech giant, citing security concerns. Meanwhile, some European governments fear that Chinese-built digital infrastructure may come with spyware and create long-term dependencies.

Erik Brattberg
Erik Brattberg is director of the Europe Program and a fellow at the Carnegie Endowment for International Peace in Washington. He is an expert on European politics and security and transatlantic relations.
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The challenge facing Europe is how to balance the security risks associated with Huawei—and the desire to stay friendly with Washington—with the need to keep pace with a crucial new technology. 

The United States and Asia are far ahead on 5G

In the United States, industry is leading on 5G wireless technology. All major telecommunications providers (including Verizon, AT&T, Sprint, T-Mobile, and U.S. Cellular) are running extensive trials and developing ambitious deployment strategies. The U.S. government has also made 5G a national security priority. However, the United States currently lacks the pipeline of spectrum bands (or digital bandwidth) that China and South Korea both have.

China’s combination of government support and industry momentum is unmatched by any other country. In its most recent five-year plan, the Chinese government spelled out its intentions to launch commercial 5G by 2020. To achieve this, the Chinese government has opened up substantive amounts of mid- and high-band spectrum and has authorized the release of at least an additional 100 megahertz of mid-band spectrum.

South Korea was the first nation in Asia to launch commercial 5G networks. Consumer 5G services are expected to launch soon, and Samsung is releasing its first 5G-compatible phone this month.

Meanwhile, Japanese wireless carriers and the Japanese government plan to launch widespread commercial 5G before the 2020 Olympics in Tokyo.

Europe has a lot of ground to make up

Despite early efforts to invest in 5G, European countries are lagging behind. Two Nordic companies (Finland’s Nokia and Sweden’s Ericsson) are among the leading global 5G technology manufacturers. But Europe’s transition is not happening broadly or quickly enough.

Most European networks will not deploy 5G networks until late in 2020 or 2021.While some operators have advanced 5G deployment strategies, many of Europe’s biggest telecom providers have only committed to a late 2020 launch date.

Europe has a history of sluggish telecommunications progress. Uneven 4G adoption means European providers now face higher costs than other phone companies to build next-generation networks. Other impediments include market fragmentation, lack of scale and availability of spectrum, regulatory barriers, and wireless operators’ preference for 4G networks.

This failure to lead on 3G and 4G has had long-term negative effects on Europe’s telecommunications industry. Falling behind on 5G will further hurt Europe’s wireless industry and broader economy, along with the strategic penalties of missing out on early-mover advantages on new technologies like artificial intelligence, the Internet of Things (extending the internet beyond computers and smart phones into other devices), and cloud computing.

Several governments are trying to speed things up

In an attempt to catch up, the European Commission launched a 5G action plan in 2016 to help roll out 5G technologies and build digital infrastructure by 2020. The European 5G Observatory was set up in 2018 to aid the Commission in monitoring progress on implementing the action plan. Governments across the EU are releasing their own plans and assigning 5G spectrum bands. So far, thirteen EU member states have published national 5G roadmaps and global strategy documents with eight more expected publish their 5G strategies during 2019.

The new European Electronic Communications Code, approved in November 2018, promotes enforceable rules to improve how countries manage spectrum. It stipulates that member states must make 5G pioneer bands available by the end of 2020. This is intended to push member states to speed up their rollout of 5G networks.

The Trump factor: steering allies away from Chinese providers 

Many European providers are already working with Chinese manufacturers. Huawei has signed memorandums of understanding with wireless providers in at least eight European countries and has tested with local providers in at least twelve. But security concerns over spyware have embroiled Huawei in controversy.

The Trump administration has leant on  U.S. allies to abandon their partnerships with Huawei, prompting European governments to take a closer look. Their main concern is that critical infrastructure built with Chinese technology may give Chinese companies access to vast troves of sensitive data and industrial information—which ultimately could be turned over to the authorities in Beijing. Chinese-manufactured 5G infrastructure could also make countries vulnerable to other national security threats, like Chinese spies and cyberattacks.

These concerns deserve to be taken very seriously by Europeans. But the heavy-handed diplomatic approach favored by the Trump administration runs the risk of being counter-productive. What’s more, inconsistent U.S. messaging – with President Trump recently signaling a softer approach to Huawei – has undermined U.S. credibility.

What Europe should do

Japan, Australia, and New Zealand have all banned Huawei from building their 5G infrastructure. At least eleven European governments are currently considering similar boycotts. Some European countries, such as Poland, have already decided to follow suit.

Individual European telecom providers have also taken steps to scrutinize Huawei. The UK’s largest telecom provider, BT, has announced plans to remove Huawei equipment from its existing networks. Germany’s Deutsche Telekom has decided to review its vendor plans, and France’s Orange has severed ties with the Chinese tech giant.

But it is unlikely that Huawei will be excluded from most European countries entirely. Huawei is the global 5G leader. It is the most advanced, cheapest provider—and European governments feel they don’t have many other choices. Vodafone CEO Nick Read warned that boycotting Huawei equipment could delay Europe’s 5G rollout by two years. Rather than formally banning Huawei, some European countries, such as Germany, are thinking about introducing new security restrictions or negotiating a no-spying agreement with China. In the UK, a cybersecurity center run by Huawei known as HCSEC has been operating since 2014, under supervision from the National Cyber Security Centre (NSCS), a British government body.

Competition between the United States and China is increasingly playing out in the digital sphere, and Europe is experiencing the first-hand effects. But rather than getting caught in the crossfire, Europe should make its own decisions. While it must seriously consider if getting rid of all Chinese 5G providers is realistic and affordable, Europe must also ponder the long-term strategic costs of becoming reliant on high-risk Chinese 5G technology.

This means that Europe must avoid rushing to hold 5G auctions, without pausing first to assess the security risks involved. The EU needs a common approach toward dealing with security risks of 5G networks, including more information-sharing, risks assessments and situational risk management measures. At the very least, European countries should wait for the European Commission to provide a recommendation before making critical decisions.

Finally, Europe should adopt a more strategic, unified approach toward China in general, that better protects critical assets. A new EU communique on EU-China relations is a good start. But it is not worth much if each European country ultimately goes its own way.