National security considerations in competition - Presentation by Roslyn Layton

National Security & Competition in 5G Mobile Markets

Strand Consult Prepared for OECD 23 June 2026

Underlying materials and data provided upon request

Agenda

• How competition and national security complement each other

• Why national security matters in 5G: Digital Distribution

• Approaches and challenges across the OECD

Competition and national security rely on similar regulatory logic. Both manage risk, whether threat of anticompetitive practices or intrusion

Competition

• Goal: welfare, efficiency, low prices, protection from anticompetitive practices

• Tools: investigation, adjudication, remedies.

• 5G relevance: licensing, mergers, standards, rollout conditions.

National security

• Goal: protect citizens, institutions, and critical systems.

• Tools: identification, investigation, decision, mitigation, enforcement.

• 5G relevance: critical infrastructure risk, coercion risk, secure communications.

Shared point

• Both are rule-bound, evidence-based, and focused on managing risk in critical systems.

Classical Antitrust vs. Security

Antitrust / Industrial Organization

Firms as independent actors

Goal: efficiency, consumer welfare, innovation

Geopolitics / State Power

Firms inside state strategy

Goal: sovereignty, power, technological leadership

Tools: competition law, merger control, market definition

Tools: industrial policy, standard, subsidies, trade controls, security screens

Assumption: markets are separable from politics

Assumption: markets are embedded in state strategy

Classic competition policy alone does not ensure state capacity, supply-chain security, technological sovereignty, and reduced risk.

Everything is becoming connected — and thus exposed.

Telecom is a not just a sector; it’s the foundation of the digital economy.

+500,000 mobile sites in EU

Connected systems: cars, homes, factories, logistics, health, government

Network equipment can a distribution channel to the tech stack.

Equipment choice can create lock-in effects.

• Just like smartphones with embedded apps, network equipment can demonstrate integration bias. Standards/interfaces can be configured with pre-determined preferences and preferred install partners.

• From 2015, China’s State Council has published plans for export of “national champions”, “integrated service ecosystems” “network power”, and “Internet Plus” productization of traditional industries (smart city, transport, manufacturing, health/pharma)

• China’s disruption strategy has been documented in PCs, LEDs, solar, wind, shipbuilding, and now robotics. China’s ends, ways and means relies on Information Infrastructure (信息基础设施), Integrated Infrastructure (融合基础设施], and Innovative Infrastructure (创新基础设施) https://digitalchinawinsthefuture.com/digital-chinasstrategic-framework-ends-ways-and-means/

Merging of Mobile Network Equipment Market

From 20 providers to (3 + 2) + long tail

• Competing network standards: GSM, DAMPS, CDMA, analog. Shift from 1G (analog) to 2G (digital) eliminated many. GSM won.

• Mobile operators spent €110B on 3G spectrum auction. Monthly ARPU dropped from €37 in 2000; €15 today (60% price drop).

• Operators squeeze equipment providers to reduce cost. Operators prefer to manage fewer vendors.

• Policy forces free roaming and restricts mobile operators’ ability to recover investment (OTTs enjoy free/discounted access), so competing only on price, operators must race to the bottom.

• Huawei and ZTE enjoy 100% market share in China; est. 40% abroad.

China’s 5G market is larger than EU, India and USA combined.

Untrusted vendors create not one risk, but a cluster of operational, security, dependency, and political vulnerabilities.

1. Critical infrastructure exposure

2. Supply chain and operational disruption 3. Strategic dependency 4. Privacy and data exploitation risk 5. Political leverage and coercion 6. Supplier autonomy and state influence

Counterintelligence risk

Lawfare and chilling effects on critics

For more information: https://strandconsult.dk/eight-risks-for-the-5g-supply-chain-from-suppliers-under-the-influenceof-adversarial-countries-like-china/

Categories of national security regulation for mobile networks

5 Eyes Based Intelligence

Explicit restrictions on country/company

Sector specific, designed to protect against litigation

Australia Canada

New

United

United

EU 5G Toolbox and DSA2

Technical assessment, industrial standards

Can extend to all critical infrastructure

Operator liability

Border Restrictions

Limited Nat Sec Controls

In Focus: DT/Vodafone Germany/Italy/Spain

Of the remaining 40 networks, about 10 have low exposure to high-risk suppliers (between 10-30%). Most of these are in countries in which the EU’s 5G Toolbox is being implemented

There is about 30 operators which have between 35-100% of their radio access network (RAN), which comes from high-risk suppliers, and which primarily operate in countries where the EU’s 5G Toolbox has not been implemented.

In the beginning of 2026, approximately 30% of the installed equipment in the 27 EU, as well as the three EEA countries (Iceland, Liechtenstein, and Norway) and Switzerland, is from high-risk suppliers.

By far the largest share of the equipment to be replaced over the next five years is located in Germany (Vodafone, O2 and T-Mobile), Italy (“Vodafone” and Windtre), and Spain (MasOrange and “Vodafone”). These three countries make up over 55% of equipment that must be replaced over the next five years.

On this replacement measure, Vodafone and Deutsche Telekom (DT) are significant. DT’s networks run across many countries and it is provisioned largely by Huawei. 58% in Germany, 100% in Greece, 100% in Austria, 100% in Czech Republic, 50% in Croatia, and 70% in Poland. Vodafone is 100% reliant on Huawei in four European countries: Czech Republic, Greece, Hungary and Romania. In Spain it is 67%; Germany; 53%.

https://strandconsult.dk/the-market-for-5g-ran-in-europeshare-of-chinese-and-non-chinese-vendors-in-31-europeancountries/

100 European mobile networks 30

Germany: 58% of 5G networks comes from Huawei. Deutsche Bahn uses Huawei’s solution. TSystems offers a white label Huawei cloud.

10 in cleanup process

60 classified “Clean Networks”

NATO, next generation weapons, and secure networks

Madrid, Spain

Germany

Red: Untrusted network installation

Green: Trusted network installation near military base

Secure NATO Communications

• Want 5G capabilities

• No procurement from communist countries

• NATO requires clean networks

Key Takeaways

• Regulation for competition and national security has similar process and focuses on reducing risk.

• Mobile operators, under financial stress, drove equipment market consolidation from 20 to (3 + 2) vendors in 20 years.

• Antitrust has downplayed China’s blocking of market access, subsidies, predatory pricing.

• Australia was a first mover in network security policy in 2012. EU followed in 2017-2019 with 5G Toolbox.

• 5G Telecommunications underpins the digital society and entails multi-faceted, potentially catastrophic security risks.

• Network equipment is the distribution channel for the tech stack. This is codified in China’s official strategy.

https://strandconsult.dk/newsletter-signup/