Germany in deal to cut Huawei's role in 5G wireless network, sources say

FILE PHOTO: Huawei's booth at the Mobile World Congress in Shanghai, China

By Andreas Rinke

BERLIN (Reuters) -The German government and mobile phone carriers have agreed in principle on steps to phase components by Chinese technology companies out of the nation's 5G wireless network over the next five years, two people familiar with the matter told Reuters on Wednesday.

Newspaper Sueddeutsche Zeitung as well as broadcasters NDR and WDR earlier jointly reported the news, saying the agreement gives network operators Deutsche Telekom, Vodafone and Telefonica Deutschland more time to replace critical parts.

Under the preliminary agreement driven by security considerations, operators will initially rid the country's core network of 5G data centres of technology made by companies such as Huawei and ZTE in 2026, said the sources, adding that a final pact has yet to be signed.

In a second phase, the role of Chinese makers' parts for antennas, transmission lines and towers should be all but eliminated by 2029, they added.

Asked for comment, Germany's interior ministry told Reuters that the government's talks with mobile carriers were ongoing.

"The government is acting on the basis of the national security strategy and China strategy to reduce possible security risks and dependencies," a spokesperson said.

The Chinese embassy in Germany did not immediately respond to a request for comment.

Germany is considered a laggard in implementing the European Union's security measures for 5G networks.

Telecoms operators in the country have previously resisted Berlin's efforts to drive the expensive phase-out of Huawei, while Huawei has rejected what it called the "politicisation" of cyber security in the country.

Reflecting the costs of a transition, the U.S. communications regulator said in May that nearly 40% of U.S. telecom companies need additional government funding to remove equipment made by Chinese telecoms firms from American wireless networks to address security risks.

(Writing by Ludwig Burger, additional reporting by Sarah Marsh; Editing by Rachel More and Emelia Sithole-Matarise)