Orange To Avoid Chinese Firms In European Market

Orange, France's largest telecoms firm, says it will seek to use Chinese equipment when developing Europe's 5G networks, opting for suppliers such as Ericsson and Nokia instead, its chief executive said.

But the company sees no issue in working with Huawei in Africa, where the Chinese company dominates as a supplier of equipment to many telecoms operators.

"We're working more and more with Chinese vendors in Africa, not because we like China, but we have an excellent business relationship with Huawei," CEO Stephane Richard told Reuters at the Mobile World Congress in Barcelona on Tuesday.

"They've invested in Africa while the European vendors have been hesitating."

European governments have tightened controls on Chinese companies building 5G networks following diplomatic pressure from Washington, which alleges Huawei equipment could be used by Beijing for spying.

Huawei has repeatedly denied being a national security risk.

Some countries, such as Britain and Sweden, had banned the Chinese vendors outright, while others have encouraged telecom operators to opt for European suppliers, particularly in the core parts of their networks.

"It's not only the pressure from the government - we are European citizens and share the concern," Richard said in an interview on the sidelines of Mobile World Congress. "We can't ignore the fact that the big Chinese players are close to the Chinese state."

Ericsson and Nokia have steadily taken market share from Huawei and, late last year, Orange's Belgian division decided to progressively replace Huawei equipment with kit from Nokia.

The Orange CEO also showed willingness to use gear from South Korea's Samsung, which he described as an alternative to the "China vs. Europe debate".

Samsung signed Vodafone as its first European customer earlier this month as it tries to enter a market dominated by Nokia, Ericsson and Huawei.

"We'll need time and additional investment to build new standalone networks with multiple vendors," Richard said. "The fact is that in Europe today developing 5G networks with Chinese vendors is more and more difficult - we take this as a reality."

The Orange chief, whose third four-year mandate expires next May - shortly after France's presidential elections - has faced questions about his leadership and the success of his business ventures, particularly after a network outage that disrupted France's emergency numbers this month.

The separation of the president and CEO roles within Orange, which is still 23 percent owned by France's government, could be an option for Richard, who said he supported the practice of dissociating the positions - as did a majority of shareholders. (Reuters)