US Pressure Redefines Huawei’s Cloud Strategy in Europe

Huawei faces mounting pressure in Europe’s next‑generation telecom equipment market, and its rapidly growing cloud business is now also under attack by the United States.

U.S. officials have been lobbying European legislators and industry leaders to bypass Huawei and use Western companies to build data centers and infrastructure for the surging information wave.

U.S. Deputy Secretary of State Keith Krach, on a recent European tour, met senior executives of several firms, urging them to drop Huawei for data‑security reasons, including Deutsche Telekom CEO Timotheus Hoettges and MasMovil head Meinrad Spenger.

Krach said, “Cloud should be seen as an extension of 5G. Cloud is critical, whether as a service cloud or the data centre itself.”

The Washington pressure is affecting one of Huawei’s fastest‑growing businesses. Over recent years Huawei has amassed major customers such as Deutsche Telekom, France’s Orange SA and Spain’s Telefónica, and now seeks to expand into oil companies, power‑grid operators and logistics providers.

According to IDC, Europe’s cloud‑infrastructure market reached $12.4 billion this year, a 33 % increase from 2019, with U.S. players dominating: AWS leads, followed by Microsoft, IBM, Google and Oracle.

Just as European telcos are gradually reducing reliance on Huawei for 5G, U.S. pressure is now evident in the cloud sector. Orange CEO Stéphane Richard told analysts in July that the cloud built on Huawei infrastructure “may no longer be important.” Orange’s Huawei‑based cloud is used by the European Space Agency and car maker PSA, and shortly before Richard’s analyst call, Orange signed a cloud agreement with Google.

Deutsche Telekom declined to comment on its CEO’s meeting with Krach or its cloud plans. Its largest revenue comes from its U.S. T‑Mobile unit, and it partners with Cisco, Microsoft, OVH and AWS, while also offering an “Open Telekom Cloud” product based on Huawei infrastructure.

Meanwhile, Nokia signed a five‑year deal to migrate its IT infrastructure to Google Cloud, and Google recently secured a multi‑year industrial‑cloud contract with Renault in France.

Jim Lewis, director of the Technology Policy Program at the Center for Strategic and International Studies, said, “Huawei is losing market share in Europe. Its brand is damaged. While its phone sales remain strong, its infrastructure business is being squeezed out of this mature region.”

U.S. sanctions have disrupted Huawei’s supply chain. On 15 September the United States prohibited chip sales to Huawei, severely affecting its wireless, smartphone and cloud products. The UK has imposed a full ban on Huawei 5G, and France has introduced restrictions that increase the risk for operators using Huawei equipment, though it has not enacted a total ban.

Spain’s telecom operator MasMovil, which sells cloud products jointly with Huawei in Spain, Brazil, Argentina and Chile, has withdrawn its plan to primarily use Huawei for 5G networks and works with Google, SAP and Microsoft. Krach noted that MasMovil is one of 50 telecom operators that have pledged to comply with the U.S. “clean‑network” initiative.

Huawei is far from defeated in Europe. Last week, the company opened an 8,000‑square‑foot research centre in a high‑end Paris neighbourhood, and Orange said it will selectively retain some Huawei infrastructure.

Nevertheless, the United States continues to pressure European allied nations.