TECH

Germany considers paying US$2.3 billion to remove Huawei from national security

The German government plans to use public funds to compensate Deutsche Telekom AG and other telecommunications operators for the costs of replacing equipment from Huawei Technologies Co., according to information released by Bloomberg on Thursday, 30/10.

The proposal would represent a direct state intervention in private networks after years of resistance from companies to remove components from the Chinese manufacturer, cited in several national security concerns.

The plan is still under discussion and there is no decision on whether the replacement would be gradual or immediate. The total cost of the operation could exceed 2 billion euros (US$2.3 billion). One of the possibilities being evaluated is the use of funds from the defense or infrastructure budgets, which would increase federal spending on modernizing the country's digital infrastructure, according to Bloomberg.

The measure would be part of a new special fund of 500 billion euros, created to strengthen Germany's competitiveness and finance infrastructure projects. The fund also serves to circumvent constitutional debt limits and meet military spending commitments to NATO, a requirement of the United States government under Donald Trump.

Although the Interior Ministry has officially denied knowledge of such a proposal, discussions are ongoing. Deutsche Telekom, Vodafone Group Plc, and Telefónica SA, which operate networks in the country, declined to comment, according to Bloomberg. Huawei also did not respond.

The replacement of Huawei equipment is a recurring issue in the European Union, which is pressuring member countries to reduce the presence of Chinese suppliers in their networks. While the United Kingdom and Sweden have already mandated complete removal, Germany had been adopting a more cautious stance.

The Friedrich Merz government mandated in 2024 that operators not use Chinese suppliers in core networks from 2026 onwards and that they replace equipment in critical 5G network functions by 2029. Even so, Huawei continues to supply base stations and antennas — considered less vulnerable to espionage risks.

Operators argue that Huawei products are more affordable and technologically advanced than Western alternatives. Vodafone maintained contracts to purchase Chinese radios and antennas in 2025.

Deutsche Telekom even negotiated directly with the Merz government to use new public funding mechanisms to replace equipment, which led to the opening of the current negotiations.

According to Bloomberg, the company influenced the final wording of the coalition agreement between conservatives and social democrats last year, which ended up softening the ban on Chinese suppliers. The final version of the text restricted the use of equipment to "trusted components," without mentioning specific countries.

If it goes ahead, the initiative would represent more difficulties for the technology company, which has been accused in Europe and the US of posing a security risk. But it would also involve public subsidies to remove Chinese equipment from German telecommunications networks, which would expose the government to criticism.

On the table is the possibility of the state using funds earmarked for defense or infrastructure to pay operators directly. But the talks are still ongoing and it is not yet certain that this idea will move forward.

According to the agency, which cites sources familiar with the process, replacing Huawei equipment in Germany could cost a hefty sum of two billion euros. In this market, telecommunications companies have been resisting this scenario of removing Chinese technology from networks, especially 5G.

Last summer, Germany decided to prevent operators from using equipment from Chinese suppliers in their networks, forcing the removal of Huawei technology from the core part of 5G by the end of 2026, and from the "radio" part by the end of 2029 (which includes antennas).

mundophone