Huawei infrastructure replacement could cost German rail operators up to 400 million euros

Germany’s national railway operator, Deutsche Bahn, might need to spend around 400 million euros ($437.44 million) to replace all the elements of its infrastructure provided by Huawei, the Chinese tech giant.

If the German government swiftly decides to ban Huawei components, Deutsche Bahn, a state-owned company, could encounter project delays of five to six years, as per an internal document mentioned in a report by Spiegel magazine. The German government is currently evaluating whether to prohibit specific components from Huawei and ZTE due to concerns about the impact of Chinese companies on critical infrastructure.

This potential ban could lead to diplomatic tensions, as China has already urged Germany to make decisions in line with its interests and international norms. In a bid to digitize its operations, Deutsche Bahn had previously awarded a subsidiary of Deutsche Telekom a 64-million-euro contract to provide most of the components for its new IP network, which incorporates Huawei technology.

Why does it matter? This action is part of a wider reassessment of Germany’s relationship with China. In March, Germany was already contemplating prohibiting specific components from being used in its telecommunications networks, with Chinese companies Huawei and ZTE being the focus, due to concerns over security. Nonetheless, Germany’s reliance on Chinese suppliers, especially for its 5G network, makes unraveling these connections a complex and time-consuming process.