Commission eyes a law to phase out Huawei and ZTE from EU’s telecom networks

The European Commission is weighing a legal mandate for EU member states to phase out Huawei and ZTE from mobile and potentially fixed-line networks, strengthening the 2020 5G Toolbox from guidance into binding rules. Vice President Henna Virkkunen is exploring infringement procedures and financial penalties for non-compliance, aiming to harmonize national approaches to high-risk vendors across critical infrastructure. The move would extend to fiber deployments and could reshape vendor strategies across the bloc.

Brussels is also considering external leverage by conditioning Global Gateway funding on the exclusion of Huawei equipment in supported projects, signaling a broader security-first posture beyond EU borders. The Commission underscores the economic importance of secure 5G, while China’s Foreign Ministry criticizes forced removals as politicized and harmful to technological progress. Huawei has not publicly responded.

Market reactions suggest potential benefits for European vendors, with Nokia and Ericsson shares rising on tightening risk assessments and possible bans. National divergences persist: Sweden and the UK previously imposed bans, while Spain and Greece maintain broader vendor inclusion. Germany and Finland are reviewing stricter measures, highlighting continued fragmentation and associated systemic risk.

Legalizing the 5G Toolbox would centralize risk handling amid renewed transatlantic pressure and evolving Chinese industrial policy that disfavors Western suppliers domestically. Prior naming of Huawei and ZTE by former Commissioner Thierry Breton and removal pledges in Commission networks did not yield uniform national action, indicating that binding law may be necessary to achieve consistent EU-level security objectives.