France places restrictions on Huawei phasing out involvement in 5G network in July 2020.

Context

In July 2020 the French National Cybersecurity Agency (ANSSI), announced that it was strongly recommending that local carriers avoid using Huawei products in their 5G infrastructure. The ANSSI head, Guillaume Poupard, told media that “[w]hat I can say is that there won’t be a total ban… [however] for operators that are not currently using Huawei, we are [encouraging] them not to go for it.”

At the same time, media reports citing government sources said that local carriers had been told that they would be required to hold government licenses for their existing 5G network infrastructure, with Huawei equipment typically given a license of 3-5 years, compared to European firms – Ericsson and Nokia – given eight years. The same sources claimed that local carriers had been told informally by the French government that licenses for Huawei products would not be renewed thereafter – although in some cases Huawei products might be permitted for use for eight years. Media reporting also cited the French government as saying that Huawei’s 5G technology would be restricted in the protection of sensitive military sites and nuclear installations, etc. Collectively, this amounted to an informal ban and phaseout of Huawei products by 2028 in France’s 5G infrastructure.

The introduction of this measure has been linked to national security concerns, and came in the context of great power rivalry between the US and China, and calls for Europe to take measures to deal with the alleged cyber security threat posed by Huawei. There was some speculation that the timing of France’s measure may have been influenced by the UK’s own closely timed discussions around a similar measure.

Impact

Huawei France’s reported annual revenue was €1.4 billion in 2019, but it fell to €936 million in 2021. Two French telecommunications firms, Bouygues Telecom and Altice Europe’s SFR, used Huawei products in their existing 4G infrastructure. Due to technical linkages, these components would also have to be replaced if the companies opted for a non-Huawei firm for their 5G infrastructure. Both firms had previously stated that they would seek government compensation if required to replace parts of their existing grid. As of February 2023, Le Monde reported that “Bouygues’ subsidiary is fighting in administrative courts for compensation from the state for the costs of dismantlement.”

Responses

(i) Chinese Government and Industry Responses

Huawei declined to respond publicly to the initial reports around a de facto ban and phaseout of its 5G products. Chinese state media outlet Global Times reported the measure under the headline “Mixed signals from France on Huawei spark concern”, and cited “analysts” as saying that the measure “will not only delay 5G commercialization in the country that could have taken the lead in utilizing next-generation technology, but will increase uncertainties for local telecom operators, which are now struggling amid a severe economic downturn”.

(ii) French Government and Industry Responses

ANSSI head Poupard justified the decision to press by saying that “[t]his is not Huawei bashing or anti-Chinese racism… [a]ll we’re saying is that the (security) risk is not the same with European suppliers as with non-Europeans.” And French Minister of Economy and Finance Bruno Le Maire was quoted in Chinese state media as denying the ban, saying that “[w]e (France) are not prohibiting Huawei from investing in 5G. In France there is no discrimination against any operator whatsoever”.

In August 2020 French President Emmanuelle Macron commented on the measure, following a meeting with China’s chief diplomat, Wang Yi, in Paris. ““It’s normal that … we want a European solution” due to the importance of “the security of our communication” President Macron said, while explaining that he had told Chinese President Xi Jinping that “you would do the same as me”. Macron also spoke favourably about European firms Ericsson and Nokia, which he said offered a “genuine (5G) industrial solution, fully secured”.

French firms Bouygues Telecom, Altice Europe’s TFR, Orange, and Iliad, all declined to comment to press.

Status

In February 2024 Huawei France’s offices were raided by the country’s financial prosecutors over alleged “breach of probity” (i.e. relating to corruption, influence peddling, or favouritism).

Key Takeaways

Compared to similar measures in the UK, and given the fact that it was not an outright ban, French actions were seen as far more subtle and quiet in terms of communication. It was clear that France was more careful in its framing of the measures, wishing not to overly antagonise China.

References and Further Information

Al Jazeera. 2020. “France: No Huawei ban, but 5G telecom firms urged not to use it.” AlJazeera. July 6. Available at: https://www.aljazeera.com/economy/2020/7/6/france-no-huawei-ban-but-5g-telecom-firms-urged-not-to-use-it

AP News. 2020. “France won’t ban Huawei but favors European 5G systems.” August 29. Available at: https://apnews.com/general-news-c01cd4d50b8fb29a8762120bc66bf697

Gehrke, L. 2020. “France introduces de facto ban on Huawei 5G equipment by 2028”. Politico. July 23. Available at: https://www.politico.eu/article/france-introduces-de-facto-ban-on-huawei-5g-equipment-by-2028/

Global Times. 2020. “Mixed signals from France on Huawei spark concern.” July 23. Available at: https://www.globaltimes.cn/content/1195478.shtml

Liakos, C. & Loubiere-Anderson, M. 2024. “Huawei’s offices in France raided by financial prosecutors.” CNN Business. Available at: https://edition.cnn.com/2024/02/09/tech/ china-huawei-france-financial-investigation-intl-hnk/index.html

Nicolas, F. 2020. “France’s incoherent China policy confuses partners.” IFRI. October 22. Available at: https://www.ifri.org/en/external-articles/frances-incoherent-china-policy-confuses-partners

Pinaud, O. 2023. “Huawei retains a presence in France, despite 5G ban.” Le Monde. February 21. Available at: https://www.lemonde.fr/en/economy/article/2023/ 02/21/huawei-retains-a-presence-in-france-despite-5g-ban_6016751_19.html

Rosemain, M. & Barzic, G. 2020. “Exclusive: French limits on Huawei 5G equipment amount to de facto ban by 2028.” Reuters. July 23. Available at: https://www. reuters.com/article/technology/exclusive-french-limits-on-huawei-5g-equipment-amount-to-de-facto-ban-by-2028-idUSKCN24N26R/

Xinhuanet. 2020. “France not banning Huawei from 5G, says minister.” July 21. Available at: http://www.news.cn/english/2020-07/21/c_139229917.htm