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Huawei 5G deal with Deutsche Telekom on hold

Writer: Yang Yunfei   |  Editor: Shang Ye  |  From:  

DEUTSCHE Telekom was in advanced talks to retain Huawei as its main supplier of radio equipment for new mobile networks before it put the negotiations on hold for political reasons, Bloomberg News quoted sources familiar with the matter as saying Saturday.

Deutsche Telekom, Europe’s largest telecom operator, announced last week that it was not entering into 5G network equipment contracts as it awaited the resolution of a political debate in Berlin over whether to restrict Huawei’s access to the German market.

Before that announcement, Deutsche Telekom had held discussions with Huawei in Paris and hammered out terms for a possible deal, though no contract was signed, said the sources.

In response to questions about talks with Huawei, a Deutsche Telekom spokesman confirmed that no deal or arrangement had been reached about making the Chinese company its main supplier of 5G network equipment.

Before the talks were put on hold, the sources said that the two sides had discussed key terms which envisioned that Huawei would provide 70 percent of radio transmission gear for Deutsche Telekom’s upcoming ultra-fast 5G networks for a price of 533 million euros (US$587 million).

A mechanism was also worked out that, should Huawei’s share of the 5G equipment provision fall due to any move by the Berlin government to limit Chinese involvement, the amount the company would be paid would fall proportionately, the sources said.

The Deutsche Telekom spokesman confirmed the meetings took place in Frankfurt and Paris but said negotiations about all transactions had been suspended while the Berlin government, which owns 32 percent of the telecom operator, decided on official policy regarding Huawei.