A French flag hangs near the Huawei Technologies offices in Paris this month. Bloomberg photo by Nathan Laine

France is seeking to assure China that it isn’t banning Chinese telecom equipment supplier Huawei Technologies from participating in its fifth-generation mobile rollout, even after announcing new security regulations that may effectively do just that.

The head of the country’s cybersecurity agency said this month it will grant time-limited waivers on 5G for wireless operators that use Huawei products, a decision that will likely begin a “phasing out” of the company’s products.

The pressure to reverse course comes from the U.S., which has warned that Huawei’s systems could be infiltrated by hackers or hostile states. The U.K. caved and now intends to stop using Huawei for 5G as soon as this year.

The fact that Americans are publicly praising France for its latest action has observers thinking that a change in policy is afoot. A spokesman for the finance ministry said “any talk of a ban is rumor and speculation.”

While France has avoided an outright ban like the U.K., it’s effectively forcing its companies to stop using Huawei equipment. The time-limited authorizations, between three and eight years, create uncertainty around their renewal, especially given the growing mistrust around Huawei in the West.

The finance ministry said the duration of the security authorizations doesn’t depend on who’s the supplier, but on the geographical area and other security-related factors. Decisions to grant the waivers are made on a case-by-case basis and don’t discriminate against any company, the spokesman said.

Last week, U.S. National Security Adviser Robert O’Brien said the French government was on “the right path” with its policy. France has “recognized Huawei is a threat,” O’Brien told reporters during a trip in Paris, adding that the country had been among the “early movers” with its policy regarding Huawei and 5G.

France has been walking a fine line on what has become a highly politicized issue. Last year, President Emmanuel Macron said “our perspective is not to block Huawei or any company.”

Rather, France has been seeking to strike a middle ground that would allow Huawei to remain an important supplier while keeping it out of the more integral parts of its wireless infrastructure. China is watching the recent developments closely.

China “hopes France will honor its commitments, will rise above disturbances, respect market rules and security principles,” Foreign Ministry spokesman Wang Wenbin said Thursday in Beijing.

But the temporary licenses are an unspoken move against the Chinese company. They add to the uncertainty around the timing of 5G deployment in France, which was already delayed by the coronavirus epidemic and is facing stark opposition from Green mayors. The government aims to hold an auction of 5G airwaves as soon as September to keep pace with other countries upgrading their networks.

France isn’t as invested as the U.K. was, but there are still costly implications for telecom operators Bouygues Telecom and Altice Europe’s unit SFR, which use Huawei parts in their 4G networks and had planned to do so again for 5G.

A spokesman for the French finance ministry said that no financial compensation would be offered to operators that have to change suppliers due to the new measures.

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