Huawei Technologies is demonstrating legal force in the face of increased risk of being excluded from major domestic 5G network equipment contracts in the Nordic states.
The Chinese company suffered yet another setback in mid-December when a Swedish court overturned its injunction to curb 5G spectrum auction plans by the Post and Telecommunications Authority (Postoch Telestyrelsen / PTS).
One of Huawei’s main concerns was the conditions the PTS inserted into the 5G auction licensing process that would effectively bar the company from supplying equipment to 5G network builders and operators in Sweden.
The court ruling authorized the PTS to go ahead with the auction of the 5G sphere and offer licensing in the 3.5 GHz and 2.3 GHz frequency bands on January 19, 2021.
“The allocation of frequencies in the 3.5 GHz and 2.3 GHz bands is crucial for the development of 5G in Sweden. It impacts the digitization of society. PTS will hold the auction despite the fact that the conditions must be judged legally, ”PTS said in a statement.
“Protecting the security of Sweden is a vital public interest. The PTS has determined that the conditions specified by the security services and the armed forces should apply to the permits granted.
In November, the Stockholm Administrative Court granted an injunction to Huawei to suspend the auction process for PTS 5G spectrum. Huawei’s lawsuit was sparked by the PTS ‘decision to exclude it from participating in the auction, over what the telecommunications authority called “national security reasons.” The PTS banned a second Chinese company, ZTE, from participating in the auction for the same reasons.
Huawei’s legal offer to stop the auction proved short-lived. The PTS has requested an immediate retrial of the Stockholm Administrative Court’s decision before the Administrative Court of Appeal.
The result gave the PTS the right to proceed with the 5G spectrum auction pending a full judicial review of Huawei’s initial complaints that are expected to be heard in the first quarter of 2021.
PTS’s decision to exclude Huawei from the 5G spectrum auction is based on miscalculations and confusion, said Kenneth Fredriksen, the company’s executive vice president for Central and Eastern Europe and Region Nordic.
“We consider that the court’s judgment confirms our right to participate in the action. We believe PTS is making a mistake by not allowing Huawei to participate in the licensing process, ”said Fredriksen.
“We hope that PTS does not begin the auction process until a full hearing has been called and a conclusion reached regarding the main legal arguments we presented to the administrative tribunal.”
We believe the PTS is making a mistake by not allowing Huawei to participate in the licensing process
Kenneth Fredriksen, Huawei
Huawei has offered to establish a formal “constructive dialogue” with the PTS and the Swedish authorities, said Fredriksen, which would provide strong guarantees to allay fears of any safety and security concerns related to the use of its technologies. and 5G equipment.
To further win the favor of the Swedish authorities, Huawei has even offered to build a test facility in partnership with Ericsson to validate the integrity of its 5G technologies and equipment. The company also offered a security-focused Swedish government a “no backdoor” deal covering equipment supplied to 5G networks.
PTS’s decision to exclude Huawei from 5G spectrum auctions follows extensive consultation with Säpo, the Swedish national security service, and Must (Militära Underrättelse-och Säkerhets Tjänsten), the country’s military intelligence and security service which operates under the direction of the Swedish army. Command of the Forces.
Säpo and Must have both advised the PTS to impose a 5G supplier bar on Huawei, alleging the company is cooperating closely with state and military organizations in China that pose a serious threat to Sweden’s national security – claims vigorously denied by Huawei.
The Swedish government has approved the PTS decision to block Huawei and ZTE from the 5G spectrum auction, said Anders Ygeman, Swedish Minister for Digitization.
“PTS did the right assessment on Huawei. It is good that the telecommunications authority can move forward with the 5G frequency auction. The 5G development project is important for Sweden and the frequency allocations are crucial for the expansion of the network, ”said Ygeman.
Phasing out of China’s 5G infrastructure
The PTS isn’t the only one preventing Huawei and ZTE from participating in the 5G spectrum auction. In October 2020, Swedish authorities also banned the two Chinese rivals from playing a role in its national 5G development.
In addition, the conditions linked to the 5G auction process require potential licensees of frequencies to abandon all use of the products supplied by ZTE and Huawei in new installations or new implementations of central functions of radio use in the bands. frequencies.
To this end, future 5G frequency licensees should phase out and phase out all use of equipment provided by Huawei and ZTE from existing infrastructure and core functions by January 2025 at the latest.
Huawei’s legal response came in October when the PTS released a shortlist of four Nordic and international telecommunications groups. All four have been approved by more than 20 applicants in total to participate in the 5G spectrum auction.
The shortlist includes Net4Mobility, a joint venture of Telenor and Tele2, and Hi3G Access, owned by Hutchison Whampoa, headquartered in Hong Kong. Telia Sverige and state-owned company Teracom will also participate in the auction.
Tre was among the candidates who were not shortlisted. The mobile communications company, which had partnered with Huawei to build its 5G network in Sweden, filed a “business disruption” complaint against PTS in November when the telecommunications authority blocked Huawei from the process.
Intention to appeal
Huawei has signaled its intention to appeal the outcome of the 5G spectrum auction if the PTS allocates frequencies before a full hearing of its legal objections in the administrative court.
A fundamental area of legal conflict for Huawei is the specific role of the PTS, and whether it has the power to prohibit the company from participating in 5G auctions, offering its technologies to Swedish network operators, or may prohibit Huawei to provide new 5G facilities in Sweden.
Huawei’s reach for 5G product sales continues to narrow in the Nordic region. Finland’s parliament, Eduskunta, adopted on December 7 amendments to the National Security Act that have the power to exclude “high-risk technologies and equipment” from use in 5G networks on the grounds of ” endangering national security ”.
The new legislation, which does not specifically name or ban personal equipment supply companies, aims to strengthen the country’s defenses against espionage and cyber-domain attacks targeting critical national communications systems.
Unsurprisingly, Huawei’s ‘blocking’ of PTS prompted a strong response from the Chinese government, which threatened to take retaliatory action against the more than 600 Swedish companies operating in China unless the Swedish government guarantees an open market. offering fair competition to Chinese companies in Sweden. .
“There is no evidence indicating security issues in Huawei and ZTE equipment. Sweden’s decision is an abuse of the concept of national security. It uses administrative means and state power to exclude and suppress some Chinese companies. Such a decision goes against the principles of the market economy and free competition. If Sweden excludes specific Chinese companies from its 5G market, this cannot be without consequences, ”said Gui Congyou, Chinese Ambassador to Sweden.
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