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Deutsche Telekom, Huawei Meet to Discuss over 5G Network Deal

Deutsche Telekom was in advanced talks to keep China’s Huawei as its main supplier of radio gear for brand new mobile networks before it put the discussions on hold for political reasons, based on three sources conversant in the subject.

The U.S. has urged its associates to freeze out the Chinese supplier over cybersecurity issues. Washington has told allies that China could utilize the company’s gear as spying instruments, an accusation dismissed by Huawei and Beijing.

Before that declaration, Deutsche Telekom had held discussions with Huawei in Paris and hammered out terms for a potential deal, though no papers were signed, stated the sources, who refused to be recognized because the matter is confidential.

In response to questions on talks with Huawei, a Deutsche Telekom spokesperson confirmed that no deal or arrangement had been struck about making the Chinese firm its most crucial supplier of 5G community equipment.

Prior to the talks have been put on hold, the sources stated that the two sides had negotiated critical terms, which envisioned that Huawei would offer 70% of radio transmission gear for Deutsche Telekom’s upcoming ultra-fast 5G networks for a cost of 533 million euros ($587 million).

A mechanism was further worked out that, ought to Huawei’s share of the 5G gear provision fall due to any transfer by the Berlin government to limit Chinese involvement, the amount the corporate would be paid would fall proportionately, the sources stated.

The Paris talks took place in November when Deutsche Telekom held a meeting with Huawei as well as with different potential vendors of 5G network equipment, based on the sources.