EU warns of data risks as Vietnam turns to Huawei, ZTE for 5G

Chinese vendors joining Vietnam’s 5G rollout could make some foreign investors hesitate over data security, EU Commissioner for International Partnerships Jozef Sikela said in Hanoi.

Ericsson and Nokia are building Vietnam’s 5G core network, but state-owned operators have recently awarded contracts to Huawei and ZTE, a shift from earlier caution toward Chinese suppliers.

Sikela said 5G creates strategic dependencies, and investors may avoid countries where they doubt the security of their data, though he added the impact on investment is still theoretical.

Several European countries and the US have banned Huawei and ZTE from telecom networks over national security concerns, while Vietnam has said Chinese equipment is reliable and cheaper, and more contracts are being discussed.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Vietnam’s policy shift has more layers than it seems

Vietnam’s work with Huawei and ZTE signals a change after years of caution toward Chinese suppliers.
In 2020, Vietnam joined the U.S. government’s “Clean Network” initiative, and Reuters said Vietnam agreed in 2020 to ban Huawei and ZTE from its 5G network 1.
The newer contracts described in Reuters coverage cover radio access and antenna equipment (the parts that connect phones and devices to the network), not the most sensitive network elements 2.
European firms Ericsson and Nokia still build Vietnam’s 5G core network (the central system that handles functions like data routing and subscriber information) 3.

Price is beating politics in the global 5G race

Vietnam’s choice tests how far Western pressure can go in pushing a shared stance against Chinese technology 4.
For many developing nations, cheaper gear plus quicker rollout from Chinese firms can outweigh security warnings tied to geopolitics 3.
That puts multinationals like Adidas and Lego in a bind, since they depend on Vietnam as a manufacturing hub while their home governments treat the network as a risk 3.
The EU’s influence gets harder to use, since it announced a new investment package for Vietnam’s transport and energy sectors on the same day as the warning 3.