Dutch Telecom KPN Won’t Use Huawei for ‘Core’ 5G Network

April 26, 2019 Updated: April 26, 2019

AMSTERDAM—Dutch telecom firm Royal KPN NV said on April 26 it would select a Western supplier to build its core 5G mobile network, making it one of the first European operators to make clear it would not pick China’s Huawei for such work.

The United States has been seeking to discourage its allies from using equipment made by Huawei because of concerns that it could be used for spying by the Chinese regime.

KPN, based in The Hague and the Netherlands’ largest telecom firm, said Huawei would supply 5G radio equipment, which it considers less sensitive.

Chief Financial Officer Jan Kees de Jager said the decision took into account concerns heard in the Dutch political debate and was in line with the stance to be taken by the United Kingdom, according to leaked government plans.

“They see the core networks as somewhat more critical than the radio access networks,” said De Jager, who served as the Netherlands’ Finance Minister from 2010-2012.

The Dutch government has yet to take a stance on the issue, although the head of the country’s intelligence agency this month warned against buying technology from Russia or China, countries whose spying activities he said threatened national security.

Although Huawei has been a key supplier to KPN over the past decade, De Jager argued the company’s purchasing costs would not rise by excluding Huawei in favor of companies such as Nokia and Ericsson for its core equipment.

KPN also reported on Friday slightly worse than expected first quarter core earnings of 563 million euros ($627 million). Shares were 0.4 percent higher at 2.70 euros by 0926 GMT.

The core of a 5G network is where the most critical controls are located and the most sensitive information is stored, while the periphery includes masts, antennas and other passive equipment.

KPN said it would use equipment made by Huawei, which it described as a world leader in radio and antenna technology, to improve security on its existing network.

“This preliminary agreement can be adjusted or reversed to align it with future Dutch government policy,” it added.

The Dutch government set up a task force with KPN and other major operators in the Netherlands this month to analyze the “vulnerability of 5G telecommunications networks to misuse by technology vendors … and measures needed to manage risks”.

The government is expected to make a statement on its position on the use of Chinese technology by the end of June.

UK Criticizes Huawei

Sources told Reuters on Wednesday that Britain’s National Security Council (NSC) had decided to bar Huawei from core parts of the country’s 5G network and restrict its access to non-core areas, although it is not yet official British policy.

The board overseeing Huawei equipment in the UK, which is linked to the Government Communications Headquarters (GCHQ) security service, said Huawei had failed to fix long-standing security issues.

In a report released March 28, the National Cyber Security Center said it could give “only limited assurance that the long-term security risks can be managed in the Huawei equipment currently deployed in the UK.”

It follows a similar report from July 2018 in which the board said there was “significant risk in the UK telecoms infrastructure” due to its use of Huawei equipment.

Since that time, Huawei has made “no material progress” to correct security flaws in its equipment, which underpins the UK’s communications networks, according to the report.

By Bart Meijer & Toby Sterling. Epoch Times reporter John Smithies contributed to this report.