EU plans phase out of high risk telecom suppliers, in proposals seen as targeting China

The European Union unveiled plans Tuesday to phase out telecommunications equipment from “high risk” countries in critical infrastructure across the bloc, a move widely interpreted as targeting Chinese tech giants Huawei and ZTE.

The draft legislation requires member states to remove equipment from these suppliers within three years, marking a significant escalation from previous voluntary guidelines that led to inconsistent implementation across the EU’s 27 member countries.

While the proposal doesn’t explicitly name China or specific companies, EU officials have previously designated Huawei and ZTE as high-risk vendors. The European Commission, the EU’s executive arm, formally stated in 2023 that member states were justified in restricting or excluding these Chinese firms due to security concerns.

“Our proposal is about protecting EU citizens and businesses by securing the ICT supply chains that support the critical sectors of our economy and society,” said European Commission Vice President Henna Virkkunen while addressing the European Parliament in Strasbourg, France, which must approve the legislation before it becomes law.

The new rules would make previously recommended cybersecurity measures mandatory, reflecting growing concerns about Europe’s technological vulnerabilities. The restrictions extend beyond telecommunications to include equipment in water supply systems, border security scanners, and health and medical devices—underscoring the broad scope of infrastructure the EU now considers critical to security.

Huawei, the world’s largest manufacturer of networking equipment, promptly criticized the proposal. In a statement, the company argued that legislation targeting non-EU suppliers based on country of origin rather than technical merit violates fundamental EU legal principles of fairness and non-discrimination, as well as World Trade Organization obligations.

“A legislative proposal to limit or exclude non-EU suppliers based on country of origin, rather than factual evidence and technical standards, violates the EU’s basic legal principles,” Huawei said, noting that as a “legally operating company in Europe,” it reserves the right to protect its “legitimate interests.”

The EU’s move reflects a growing Western consensus regarding Chinese technology in critical infrastructure. The United States has long banned Huawei equipment and pressured allies to follow suit, citing concerns that Chinese law could compel the company to cooperate with state intelligence services—allegations Huawei consistently denies.

The European approach has been more fragmented until now. Some member states like the UK announced complete bans on Huawei equipment in their 5G networks, while others continued procurement from Chinese suppliers, creating security inconsistencies across the common market.

The legislative proposal comes amid broader European efforts to reduce dependencies on both Chinese manufacturing and American tech services. European officials have increasingly expressed concerns about the bloc’s technological sovereignty, caught between the two global tech powers.

For the telecommunications industry, the three-year implementation timeline would necessitate significant investment for carriers that deployed Chinese equipment in their networks. Many European telecom operators chose Huawei components for their 5G rollouts due to competitive pricing and technological capabilities.

Analysts note that removing and replacing this equipment could delay 5G deployment across parts of Europe and increase costs for telecom operators, potentially affecting consumer prices and digital transformation timelines.

The European Parliament and member states will now review the draft legislation, with debates expected over implementation timelines, compensation mechanisms for affected industries, and precise definitions of “high risk” suppliers. If approved, the mandatory phaseout would represent one of Europe’s most concrete steps toward technological decoupling from China in critical sectors.