Huwaei was able to listen in to conversations made by government ministers and also had access to a database of phones which were being tapped, according to a Capgemini report dating from 2010.

Former state company KPN dominated the mobile phone market in 2009, with 6.5 million subscribers and Huawei was an integral part of its technological base.

Lawmakers from across the political spectrum have called for a government statement about the role of Chinese telecom company Huawei in the KPN mobile phone network.

Looking to cut costs further, the company asked Capgemini to draw up a risk analysis as part of preparations to transfer the management of Chinese parts of the system into Huawei’s hands.

The findings were considered so explosive at the time that the report’s authors said that the continuity of KPN could be in danger because the company may lose its license and the confidence of both the Dutch state and industry.

The researchers could not, however, establish if and how often Huawei listened in to conversations.

Its findings put “the continued existence of KPN Mobile in serious danger” since users “may lose confidence … if it becomes known the Chinese government can monitor KPN mobile numbers,” the report concluded.

KPN continued to award several contracts for parts of its core 3G and 4G networks to Huawei after receiving the Capgemini report, which is never made public.

Last year, however, KPN became one of the first European operators to exclude the Chinese company from its core 5G network, opting for Sweden’s Ericsson instead.

Michel van Eeten, a professor at Delft University and a member of the Cyber Security Council told the paper that the telecommunications market was extremely competitive at that time. ‘That is how cheap Huawei got in,” he said.

“At that time, security was not as important. That way of working would be considered unacceptable now.” There is also more awareness of the geopolitical implications of bringing in outsiders, he said.

Last year, the US designated Huawei and ZTE Corp as national security threats, saying they have close ties with the Chinese Communist Party and China’s military apparatus. (ANI)

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Huawei’s net profit was up 3.2% and reached 64.6 billion yuan ($9.9 billion), the company said as it presented its 2020 financial results on Wednesday. Meanwhile, its revenue rose by 3.8% year-on-year to hit 891.4 billion yuan ($136.7 billion).

The annual revenue growth was modest compared to the previous year when it amounted to 19%. Year-on-year net profit growth was also slower compared to 5.6% a year earlier, and the contrast is even more staggering compared to 2018, when it amounted to 25.1%.

“Over the past year we’ve held strong in the face of adversity,” Huawei’s rotating chairman, Ken Hu, said in a statement. “Because of the unfair sanctions placed on us by the US, our mobile phone business saw a revenue decline.”

While the company’s statement says that overall financial results were in line with its forecasts, Ken said the performance of the consumer business “fell short” of the company’s expectations due to a fall in smartphone revenue.

Last year’s growth was mainly driven by the company’s success at home, while Huawei’s business declined in its overseas markets. Sales in China jumped over 15% to total 584.9 billion yuan ($89.7 billion), accounting for over 65% of total revenue. Revenue in the Americas plunged by nearly a quarter, while it was down 12% in Europe, the Middle East and Africa, and 9% in Asia-Pacific. However, Huawei still feels “more optimistic” about next year’s performance beyond the domestic market.

Last year marked the first full year under the US sanctions for Huawei. Washington placed the company on its infamous Entity List in May 2019, essentially prohibiting American companies from doing business with the tech giant and making it difficult, or impossible, to export vital technologies to Huawei. Additionally, the US moved to block global chip supplies to Huawei and pressured its allies to ditch Huawei equipment, especially in the rollout of 5G networks.

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The ban is to “ensure that the use of frequencies does not endanger the security of Sweden,” said the Swedish Telecom Authority (PTS).

The authority added that Huawei and ZTE equipment already installed will have to be removed by 1 January 2025.

The announcement comes after Sweden’s armed forces and security services made an assessment of telecommunications network tenders.

Sweden’s decision follows the lead of the UK, who decided to ban Huawei from involvement in its 5G network in July.

Several other European countries are gradually closing the door on Huawei or are considering doing so after pressure from the United States, who consider the company as being part of China’s surveillance state.

In France, Huawei will not be subject to a total ban on the 5G market, but operators already using the firm’s equipment will have operating authorisations limited to eight years.

European Commission officials have stated that rivals to Huawei, such as Sweden’s Ericsson or Finland’s Nokia can provide the EU with the necessary 5G infrastructure.

“The new installations in the central functions for the radio use of the frequency bands must be carried out without Huawei or ZTE suppliers”, the Swedish authority said in a press release.

If these central functions of the network are “dependent on staff or functions located abroad, these dependencies must be eliminated and if necessary replaced by staff or functions in Sweden”, the PTS also stated.

In just a few years, Huawei has become the world leader in telecom network equipment with a notable lead over 5G, and now outstrips its rivals in market share.

ZTE is also one of the world’s leading suppliers of equipment, such as antennas.

But in Sweden, four operators have been selected for the upcoming auction round on 10 November for 2.3 and 3.5 GHz frequencies for the future 5G network.

These include the former incumbent Telia, as well as Hi3G Access – better known under its “3” trademark – Net4Mobility, and the audiovisual distributor Teracom, says PTS.

The authority did not confirm if Huawei equipment would remain in use for 4G, 3G, and wired internet.

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The issue is expected to feature at a G7 summit that US President Donald Trump will host next month against the backdrop of a fierce confrontation with China that has been exacerbated by a global blame game over the spread of the novel coronavirus.

Britain has allowed the Chinese global leader in 5G technology to build up to 35 percent of the infrastructure necessary to roll out its new speedy data network.

But Prime Minister Boris Johnson was reported by The Telegraph newspaper last week to have instructed officials to draw up plans to cut Huawei out of the network by 2023 as relations with China sour.

The Times newspaper said Britain is proposing a “D10” club of democratic partners that groups the G7 nations with Australia and the Asian technology leaders South Korea and India.

It said one of the options involves channeling investments into existing telecommunication companies within the 10 member states.

A Downing Street spokesman confirmed that Britain is reaching out to partners in search for an alternative to Huawei.

“We (are) seeking new entrants into the market in order to diversify and that is something we’ve been speaking with our allies about, including the United States,” the Downing Street spokesman said.

Few options

Finland’s Nokia and Sweden’s Ericsson are Europe’s only current alternative options for supplying 5G equipment such as antennas and relay masts.

“We need new entrants to the market,” a UK government source told The Times.

“That was the reason we ended up having to go along with Huawei at the time.”

Johnson’s decision to include Huawei angered Washington because it believes that the private Chinese company can either spy on Western communications or simply shut down the UK network under orders from Beijing.

The United States has imposed several rounds of sanctions on Huawei that have put the future of Britain’s 5G rollout in peril.

Downing Street said the UK National Cyber Security Centre was studying the implication of the US sanctions on Huawei’s immediate ability to produce the equipment Britain needs.

Pressure on Johnson to cut ties with Huawei is being compounded by the new security law Beijing plans to impose on the once British-held Hong Kong.

London infuriated Beijing on Thursday by saying it would offer 350,000 Hong Kong nationals holding a British National (Oversees) passport the right to relocate to the UK if the new law goes into effect.

But Johnson’s reported plan to completely remove Huawei from the UK network could prove costly at a time when his government is seeking new trade partners following Britain’s exit from the EU.

Johnson challenged his US critics in January to come up with an alternative to Huawei if they did not want Britain to use the Chinese firm.

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U.S. sanctions

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