Superpowers embroiled in Cyprus 5G turf war

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Cyprus’ 5G network rollout is caught up in a tug-of-war between two superpowers, China, and the US, locked in a battle for technological supremacy and geopolitical influence.

China has accused the US of openly lobbying Cyprus to join its camp against Chinese vendors, such as tech giant Huawei and other telecom firms, which they deem to be a risk for cybersecurity and democracy.

Cyprus is heavily reliant on Chinese technology in its communications infrastructure like 5G.

It is estimated that more than 90% of consumers in Cyprus are served in one way or another by Huawei products while telecom firms such as Epic and CyTA rely on infrastructure equipment from the Chinese communication giants.

Beijing is calling out the US for campaigning to rally allies throughout Europe to join an anti-Chinese camp.

US Ambassador Judith Garber told the Financial Mirror: “The United States and the European Union have been having an important dialogue on 5G.”

“We both agree on the importance of using trusted vendors for our networks. The security of our networks is extremely important, and as the ROC rolls out its 5G program we look forward to continuing to engage with them and others on this issue.”

Nicosia says it has not conceded to any pressure, with Deputy Minister for Research Innovation & Digital Policy Kyriacos Kokkinos telling the Financial Mirror that Cyprus is committed to implementing EU decisions on the issue.

The matter of contention is a Memorandum of Understanding between Cyprus and the US to enhance their cooperation in science and technology in areas of 5G security and FinTech for economic growth.

This has been interpreted by China as Cyprus joining the US in an anti-Chinese 5G equipment ban.

The Memorandum was signed on 21 October in Nicosia between Kokkinos and US Under Secretary of State for Economic Growth, Energy and the Environment, Keith Krach.

China’s embassy in Cyprus said it was part of the US venture to “intimidate its allies into jumping aboard its “Clean Network” initiative”, which seeks to curtail the influence of Chinese tech firms on the development of data networks around the world, more specifically the deployment of 5G.

Countries should “say ‘no’ to the US practice of bullying and interfering” in the development and construction of their 5G networks, the embassy said in a statement posted on Facebook.

“This is the latest example of US resorting to diplomacy of lying and alienation. The US is covered in mud all over and is in no position to criticize others in terms of internet espionage.”

The Chinese Embassy claimed the US is fabricating and spreading rumours about the security threat posed by China 5G network companies.

“So far not a single country, organization, company or individual has presented any evidence showing that Chinese companies pose a threat.”

Krach’s+ visit to Cyprus is seen as part of a whirlwind tour of Europe and North Africa, where scrutiny of Chinese 5G firms, like Huawei and ZTE, is high on the agenda.

“Before arriving in Nicosia, Krach visited Estonia, which banned Huawei from its networks earlier this month. After Cyprus, he flew to Egypt where he also appealed to leaders to join the Clean Network scheme,” said the embassy.

Sweden last week banned both Chinese companies from building its next-generation telecommunications networks.

Earlier in the year, UK Prime Minister Boris Johnson, under US pressure, ended the so-called “golden era” of commercial relations with China by excluding Huawei from the development of Britain’s hi-tech 5G mobile communications network casting shadows on the rollout of the revolutionary technology in the rest of Europe.

Clean Network

The Chinese believe this MoU confirms Cyprus’ membership to the scheme while signing a separate deal to cooperate on science and technology.

Following the signing ceremony, Krach essentially welcomed Cyprus, to what he called a ‘Clean Network’ which consists of countries “who work together as trusted partners to protect our citizens from those companies and countries we deem untrustworthy.”

“We are excited to have Cyprus on the path to the 5G EU clean toolbox which means you would be joining the clean network, which is comprised of like-minded countries and companies that are committed to using only trusted vendors of 5G,” Krach said.

The US official stressed the importance of 5G-clean infrastructure, implying that Cyprus should not use suspect Chinese equipment in its network, although he didn’t mention China.

US regulators say Chinese tech firm Huawei poses a national security risk, alleging that the Chinese government could use Huawei equipment to spy.

“As the United States, the European Union, and other like-minded partners look forward with excitement to the opportunities of the digital future, others seek to exploit our greater interconnectivity and our freedoms—like China and Russia,” said Krach.

“The Republic of Cyprus has the potential to be a regional hub for innovation and tech services if it makes these investments in the future to use only trusted telecommunications, and that is starting now”.

Asked to comment on whether Cyprus has joined the ‘clean network’ or an anti-Chinese camp, Kokkinos said that Cyprus has done no such thing and the country’s 5G rollout would not be affected by restrictions on vendors based on their origin.

“Cyprus is fully committed to, is applying the EU toolbox, which is important to note that it does not exclude or target any supplier or country in particular”.

“5G is a great opportunity, but like any new technological advance, poses challenges, security risks are one part of the challenge.

Cyprus being actively involved in the process along with the other Member States developed the EU toolbox on 5G Cybersecurity”.

Kokkinos argued that to mitigate the security risk, the toolbox recommends that all Member States assess the risk profile of suppliers, and as a consequence, apply relevant restrictions for suppliers considered to be high risk for key assets defined as critical and sensitive.

Internet of Things

The European Competitive Telecommunications Association (ECTA) issued a statement denouncing any ban of Chinese 5G suppliers for geopolitical reasons and emphasizes that such decisions can only be justified on well-established facts.

As an independent observer, Antonis Polemitis, University of Nicosia CEO and an instructor in the Digital Currency programme said that 5G is an important step forward globally in telecommunications and internet infrastructure supporting a variety of new cutting edge applications such as Virtual Reality, Internet of Things and autonomous machines.

“5G deployments are hotly contested globally.  First, they represent a tremendous commercial opportunity for vendors.

“Second, there are geopolitical aspects related to network security that is also part of the discussion.

“The intensity of this competition for deployments can be understood by the fact that even small markets like Cyprus are being heavily lobbied by multiple countries.

“The geopolitical considerations, if any, are for the government to address; for the consumer and application developers, 5G will be a positive development.”

A source close to procedures on 5G rollout in Cyprus said  Nicosia should be allowed to make its own decisions without political pressure.

“Each country should be making its own decisions regarding who it will be assigning network platforms to and which companies are to be considered eligible vendors providing the equipment to the companies.”

“Excluding vendors like Huawei could lead to delays as Huawei has already signed memorandums of cooperation in the Republic of Cyprus amid efforts to create conditions for a smooth introduction and development of the 5G network”.