The Norwegian government’s decision not to implement an outright ban on the use of 5G equipment supplied by Huawei has left the door open for the Chinese company to pursue non-core 5G network opportunities in Norway.
This shifts decision-making on contracts and partnerships concerning the purchase and deployment of Huawei technologies to the boardrooms of individual telecom companies.
But the government’s resolution, broadly welcomed by industry chiefs within the telecom and mobile communications domain, is proving unpopular in Washington.
The Trump administration has actively lobbied Nordic governments not to do business with Huawei on the basis that technologies embedded in its equipment could pose a national cyber security threat because of the uncertain nature of Huawei’s relationship with China’s defence and intelligence agencies.
“The specific focus of our security requirements falls on telecommunications companies and not on individual suppliers,” said Nikolai Astrup, Norway’s minister of local government and modernisation. “The government maintains an open and productive dialogue on security requirements. It is the direct responsibility of telecom sector companies to conduct their own risk assessments in selecting equipment suppliers.”
Despite Norway’s strategic and distinctive approach to Huawei, the company is finding it more difficult to build partnerships through 5G equipment delivery contracts across Nordic markets. This comes in the wake of a series of contract setbacks in 2019 that saw Ericsson win partnership deals with TDC and Telenor for their core national 5G network builds in Denmark and Norway.
Huawei’s strained relationship with the Danish government, a situation compounded by claims from government officials of attempted Chinese interference in the 5G decision-making process, has not helped the Chinese company’s cause in securing high-profile 5G network build agreements. Huawei has also failed to impress Danish authorities with its offer to provide pro forma guarantees on the integrity and security of its 5G technologies and equipment.
For Huawei, Norway and Denmark presented the two Nordic markets with the most potential in the 5G network equipment space. In Sweden and Finland, local operators were always more likely to favour local partnerships with hardware suppliers Ericsson and Nokia as lead 5G network equipment suppliers.
In practical terms, the Norwegian government’s stated policy of allowing telecom operators to choose their own 5G partners will allow Huawei – which has been supplying network technologies to Norway since 2007 – to pursue new but non-core 5G network equipment sales and partnership opportunities in that market.
Although Telenor has partnered with Ericsson to deliver its national 5G radio network in Norway, the Norwegian state telco will continue to use Huawei to maintain its 4G radio network as well as upgrade 5G coverage in some geographic locations across the country.
“Telenor has used Huawei as a supplier to our networks in Norway since 2009, and our experience with working with them has been positive,” said Anders Krokan, vice-president of communications at Telenor Norway. “Huawei has delivered on the strict security and quality requirements we have for our suppliers. This is a fundamental condition in our co-operation.”
Equipment suppliers, foreign and domestic, to Norway’s telecoms sector are regulated under two primary laws – the Law on Electronic Communications (LEC/Ekomloven) and the Law on National Security (Sikkerhetsloven). The LEC includes rigid provisions regulating the acquisition of equipment and the use of technologies offered by foreign suppliers from countries that do not hold a mutual security agreement with Norway.
Norway’s security stipulation, enacted in 2019, added a further layer of complexity to Huawei’s pursuit of a 5G partnership deal with Telenor, given that Norway does not have a mutual security arrangement with China.
The LEC incorporates rules governing the interception of electronic communications and time-limited storage of personal data. The legislation sets down the conditions under which network operators and equipment suppliers may capture and retain metadata.
In the case of traffic data, the LEC determines that this must be deleted or rendered anonymous as soon as the data is no longer needed for communications or invoicing purposes. The law requires the consent of users in the further processing of traffic data.
It was the aggregate of Norway’s national security legislative infrastructure, combined with strict oversight and policing mechanisms, that played a major role in convincing the government to shift responsibility for future collaboration with Huawei from the state to telecoms industry players.
Norway’s policy position has the potential to improve trade and political relations between Oslo and Beijing, which turned frosty after Telenor announced its national 5G radio access network (RAN) partnership with Ericsson in December 2019. Due to its deepening co-operation with Telenor, Huawei had been the leading candidate to secure the contract since 2017.
Not surprisingly, Beijing responded negatively to the Telenor-Ericsson partnership, expressing its disappointment and hinting that the decision could damage its growing trade relationship with Norway. In an email to the Norwegian Prime Minister’s Office, China’s Embassy in Oslo described the Telenor-Ericsson deal as tantamount to “an act of discrimination against China”.
The email expressed concern that the “decision-making process may have been influenced by factors that are not market-controlled or technical”. The Norwegian government countered by describing the 5G supplier selection process as “transparent and fair”.
Huawei’s upset over the loss of Norway’s national 5G network build contract to Ericsson was heightened by an escalation in the company’s co-operation with Telenor that was manifest in various 5G pilot projects in Norway since 2018. That relationship with Telenor deteriorated against the backdrop of US criticism of Huawei, particularly during the second half of 2019, culminating in the loss of the national 5G network build to Ericsson.
Huawei’s restructured relationship with Telenor means the company will be able to participate as a supplier of “non-core” 5G equipment in the Norwegian telco’s national 5G RAN projects, but not its core network. As a result, Huawei will collaborate with Telenor to maintain the current 4G network and upgrade to 5G coverage in “selected areas of Norway”.
Its collaboration with Telenor as a non-core 5G gear provider will also apply to Finland, where Telenor’s subsidiary, DNA, will also employ Huawei as one of its 5G RAN equipment suppliers.
In Norway, Huawei participated in the roll-out of a 5G network at Telenor’s headquarters at Fornebu, outside Oslo. The two 5G base stations at Fornebu were developed to serve two different purposes. Fornebu’s 26GHz base station, which is part of the EU-funded 5G-VINNI research partnership, features equipment supplied by Huawei. The second base station, operating on 3.6GHz, forms part of Telenor’s general 5G expansion project in Norway.