China's telecom giant, Huawei Technologies, has just won the contract to supply the 5G infrastructure in Germany after the German government delayed its decision back in November on whether Huawei could be a provider.
An announcement by Telefonica Germany, the second-biggest operator after Deutsche Telekom, on Wednesday December 11th confirmed the awarding of the contract. The politically-sensitive deal is subject to government approval following US concerns about snooping.
The announcement is a boon to Huawei after Deutsche Telekom AG said last week it had stopped ordering new 5G equipment because of political uncertainty over Chinese suppliers, according to Bloomberg.
Huawei has repeatedly denied allegations its equipment could be used for espionage. The German government is currently drawing up security guidelines for the country's 5G network expansion, so it may still be too early for Huawei to declare victory in Germany.
Chancellor Angela Merkel has indicated she does not want to bar the Chinese firm as long as it abides by certain security standards, which are still to be determined.
However, according to Bloomberg, there are some in the intelligence community who would like to block Huawei. In today's deal, Telefonica Germany said it was giving Huawei and Finland's Nokia an equal role in the project, calling the two companies "proven strategic partners", according to AFP.
"This cooperation... will be subject to successful security certification of the technology and the companies in accordance with the legal regulations in Germany," Telefonica Germany said in a statement.
The company, a unit of Spanish giant Telefonica, said it was "thus responding to the ongoing political process of defining these security guidelines without delaying the start of the 5G roll-out".
It said it would begin the 5G upgrade next year and was hoping to supply 30 cities by the end of 2022. The US and other international powers have voiced concerns that Huawei could be used by Beijing for spying purposes, a claim the company strenuously denies.
Germany has so far defied pressure to exclude Huawei from taking part in the bidding process, insisting that it would set stringent security conditions. But critics have accused Berlin of trying to appease China, its largest trading partner, and putting economic interests first.
Last month, Economy Minister Peter Altmaier sparked US anger by drawing a parallel between alleged Chinese and US snooping as part of the debate. Altmaier referred to the allegations that began emerging in 2013 of US spying on German soil.
Altmaier also pointed out that the US required its own telecoms companies to provide information "that is necessary in the fight against terrorism".
US Ambassador Richard Grenell said there was "no moral equivalency between China and the United States".