DB could face 400 millions in expenses if it breaks up with Huawei

German parties are discussing a potential ban on Huawei’s technology in rail. The ban would result in the replacement of the entire Huawei component in railways, which has been a vital part of Deutsche Bahn’s (DB) IT infrastructure. The replacement would cost up to 400 million euros.

Der Spiegel reported the information according to a DB internal report. The report revealed that the abandonment of Huawei’s technology in German railways would threaten other rail projects and result in a project delay of five to six years. The replacement of Huawei’s infrastructure in German railways is the consequence of German politicians’ concern over espionage issues.

DB has been using Huawei components since 2015, and a large part of its internal communication relies on Huawei’s technology. Der Spiegel reported that for northern Germany alone, almost 800 base stations will be impacted if the replacement becomes a reality. The base stations create a network for communication between train staff and control centres.

Controversial DB-Huawei business

Last December, DB indirectly awarded Huawei a 64 million euros contract to build its internal IT network. The contract was signed between DB and Deutsche Telekom, a German telecommunications company. The telecommunications company, however, will purchase Huawei’s equipment to build up the network.

The contract has spiked security concerns over the violation of German IT security laws. A spokesman for Deutsche Telekom said via Reuters that Deutsche Telekom’s procurement of Huawei’s equipment did not lead to legal violations. Moreover, since this IT infrastructure will serve as DB employee’s internal communication tool, the approval from federal government will not be needed. The current IT security laws in Germany do not cover the railway sector.

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