Germany launches 5G auction amid row with US over Huawei

'5G' is the latest, high-speed generation of cellular mobile communications.

BERLIN (AFP) - Germany launched its auction Tuesday for the construction of an ultra-fast 5G mobile network as a transatlantic dispute rages over security concerns surrounding giant Chinese telecoms equipment maker Huawei.

The United States has warned it could scale back the sharing of sensitive information with Berlin if it does not exclude hardware made by Huawei from the infrastructure, arguing that Chinese equipment could help Beijing spy on Western companies and governments.

However, Jochen Homann, chairman of the German Federal Network Agency (BNA), says excluding Huawei s equipment would present significant problems for the auction winners.

"Huawei is an important supplier, already present in our previous networks -- it will be difficult to do without such companies and this is not at all what we want," Homann told German public broadcaster ARD.

 5G  --  fifth generation  -- is the latest, high-speed generation of cellular mobile communications and Berlin will require winning bidders to offer 5G service to at least 98 percent of German households and along motorways and rail lines.

Germany, Europe s biggest economy whose wireless networks however rank only 46th in the world for download speeds, wants to close the sizeable digital gap by making the shift to the ultra-fast 5G system.

The BNA started the auction in Mainz at 0900 GMT on Tuesday and the process will allocate 41 different frequency blocks.

Four operators are in the running, among them Germany s three main mobile network providers -- Deutsche Telekom, Vodafone and Telefonica Germany (O2) -- plus United Internet (1&1), a German company specialising in internet services.

Huawei is not one of the bidders but provides the four contenders with essential hardware such as antennas and routers.

The US has accused Beijing of using Huawei s 5G network gear as a Trojan horse, forcing operators to transmit data to the regime, but Washington has not provided evidence to support their suspicions.

Huawei has strenuously denied allegations its equipment could be used for espionage, while Chinese Foreign Minister Wang Yi on Monday lashed out at what he called "abnormal, immoral" attacks on the Chinese firm.

US fears of security compromise

US-led attempts to encourage other nations to ban Huawei equipment from their telecoms infrastructure suffered a setback when Chancellor Angela Merkel s government decided against imposing company specific-restrictions on the 5G auction.

With other nations across the EU also grappling with the same issue, Jyrki Katainen, vice-president of the European Commission, said Brussels will make recommendations on security in digital networks.

But he told business daily Handelsblatt that it is "unlikely that we will name one or two companies that should be excluded".

 According to media reports, the US ambassador to Germany last week warned in a letter to Germany s economy minister that Washington could review intelligence cooperation unless Berlin agreed a Huawei ban.

The threat escalated when NATO s Supreme Allied Commander in Europe, US General Curtis Scaparrotti, warned Germany that NATO forces would cut communications if Berlin were to work with Huawei.

Scaparrotti said the US military is concerned about the risk of Germany s telecommunications being compromised as "particularly with 5G, the bandwidth capability and ability to pull data is incredible".

"If it also is inside of their defence communications, then we re not gonna communicate with them. And for the military that would be a problem."

Merkel has tried to reassure Washington by saying Germany would consult with the US over whether to use Huawei tech, but would "define our standards for ourselves".

However, Germany s Federal Intelligence Service (BND) shares some of the US fears.

BND security experts have asked the government to take China s overall strategy into account, including a law compelling cooperation in security matters, according to a report in Der Spiegel magazine.

Other media outlets claim Berlin is drawing up a catalogue of measures, for all 5G providers, to change the telecommunications laws.

These measures range from a non-espionage clause to a requirement to test all components as well as an obligation to publish source code used in infrastructure.