Telefonica Deutschland has chosen Finish Nokia and Chinese Huawei to build its 5G network, seeking to get work moving even though Germany has yet to finalize security rules governing equipment suppliers.
Huawei and Nokia will supply the radio access network in equal parts because they’re “proven strategic partners,” Telefonica Deutschland Holding AG said in a statement on its website.
The decision comes amid heated debate in Germany over whether to heed U.S. warnings that Huawei poses such a serious security threat that it should be excluded from critical network infrastructure. The German government, under U.S. pressure, is currently drawing up security guidelines for the country’s 5G network expansion, in a move that’s expected to require certification of equipment such as antennas and base stations.
Telefonica Deutschland also said it would cut its 2019 dividend by 37% to prioritize network investments, following on the heels of similar cuts in the payout by competitors Deutsche Telekom and Vodafone.
Telefonica Deutschland, which operates under the O2 brand, is one of few European operators to have named Huawei as a 5G vendor, following first-Sunrise of Switzerland, whose Huawei-built 5G network went live earlier this year.
“We hope that this window of uncertainty will be as short as possible - we don’t yet have certification for any of our vendors,” Telefonica Deutschland CEO Markus Haas told reporters on a conference call.
Germany’s mobile operators Deutsche Telekom and Vodafone are existing customers of Huawei but have yet to publicly confirm whether they will stick with the Shenzhen-based networks leader for 5G.
Work should start in early 2020, and Telefonica Deutschland said it expected to have 5G up and running in Berlin, Hamburg, Munich, Cologne and Frankfurt by the end of 2021. A year later, 30 cities with a population of 16 million would be covered.