Orange Europe boss: we will stay with Huawei unless it is banned

Huawei is the telecoms voldemort for European operators, the supplier that will not be named.

“The Chinese seller” was how Mari-Nolle Jgo-Laveissire of Orange initially referred to a company now banned from parts of the European telecommunications industry. But as she was about to answer a question about Huawei, the CEO of Orange Europe became less restrained as if to remind everyone that Huawei still figures prominently in Orange’s footprint.

What is clear is that Orange is taking the example of the authorities on the advisability of replacing a supplier considered to be a security risk by the US government.

“There is no hard and fast rule in the group that we are no longer going to work with Huawei,” Jgo-Laveissire said at a press conference in London earlier today.

“We are careful in Europe to follow the rules of the different countries, it is explicit in some countries but absolutely not in others, which allows us to keep a balance.”

Orange Europe boss Mari-Nolle Jgo-Laveissire stays with Huawei as much as possible.

These rules involve the use of other suppliers in France, who indicated last year that the licenses for the Huawei kit will not be renewed when they expire in the next few years.

Orange, in any case, had previously relied on Ericsson and Nokia as 4G providers in its home market. It has now signed agreements with the two Nordic companies for 5G Radio Access Network (RAN) products.

Elsewhere, Orange’s dependence on Huawei as a RAN provider has seemed heavy.

In Spain, its second-largest market in terms of sales, around 60% of its 4G network came from Huawei last year, according to data compiled by Strand Consult, a Danish consulting firm. In Poland, Orange’s third-largest market, Huawei supplied 70% of 4G RAN in 2020, while in Romania it was Orange’s sole 4G RAN supplier.

Favorable conditions

The desire to keep Huawei is largely a question of price, Jgo-Laveissire said. It plans to continue to rely on a joint procurement partnership with German Deutsche Telekom (DT) to lobby other suppliers and secure favorable terms.

“We make calls for tenders [requests for proposal] globally with the footprint of Orange and DT, which allows us to have the price we want or use Ericsson or Nokia, ”she said.

“This way of working allows us to get the right price even if Huawei is not in the game in some countries.”

Orange is unlikely to be happy with government orders to replace Huawei as a supplier of 5G kits. Removing it from networks in Spain, Poland and Romania could be an expensive process that delays the rollout of 5G for Orange.

The problem is largely that Orange is also expected to replace Huawei’s 4G equipment with products provided by the new 5G provider. Failure to do so would risk causing interoperability problems.

U.S. authorities have previously relied on European countries to exclude Huawei, arguing its Chinese identity made it a security threat. Their apparent concern is that the Chinese government could use malware installed in Huawei products to snoop around other countries or even bring down their telecommunications networks.

“The main concern is not espionage,” said Michael Trabbia, now Orange’s chief technology officer, in a previous conversation with Light Reading when he was at the head of the Belgian subsidiary of ‘Orange. “The fear is their ability to shut down or block the network.”

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Belgium is a rare example of a European country where Orange has announced its intention to replace Huawei, previously the sole provider of RAN for the network shared with the incumbent operator Proximus.

In October last year, Orange announced that it would switch to Nokia when building its 5G network and for a swap of 2G, 3G and 4G systems. The update came months after reports surfaced that Belgium would impose restrictions on “high-risk” suppliers, the European standard designation for Chinese companies.

In addition to relying on European governments, the United States has also imposed sanctions on Huawei that cut it off from its critical suppliers, including TSMC, a Taiwanese chipmaker. Huawei executives recently warned the industry that device revenues would drop from $ 30 billion to $ 40 billion this year, from $ 50 billion in 2020, due to these sanctions.

Major deals with Chinese operators have supported Huawei’s networking business, but it also appears vulnerable to the component blockade and appears to have relied on inventory to continue serving customers.

While the European Union’s rules are ambiguous about Huawei’s role in the RAN, they have expressed more concern about its involvement in the 5G core, generally considered the brains of the system. This is a part of the Orange network where Huawei can probably see itself as unwelcome as Voldermort in the future.

“In every country, the core is unlikely to be Huawei,” said Jgo-Laveissire.

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Iain Morris, International Editor, Light Reading

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