The decision by the unit of Spain’s Telefonica comes amid 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.
Telefonica Deutschland also said it would cut its 2019 dividend by 37 percent 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 the European operators to have named Huawei as a 5G vendor. Sunrise of Switzerland has built 5G network using the mobile network from Huawei.
The development comes at a time when Germany is yet to finalize security rules governing equipment suppliers.
“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 other two mobile operators – market leader Deutsche Telekom and Vodafone – are existing customers of Huawei but have yet to confirm whether they will stick with the Shenzhen-based networks leader for 5G network deployment.
Markus Haas hoped that Nokia and Huawei would build the Telefonica Deutschland 5G Radio Access Network on a 50-50 basis, but cautioned that this would be subject to receiving the necessary certification in Germany.
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.
A decision on picking suppliers of its more sensitive ‘core’ network would be taken next year, Haas said.