Germany cancelled a contract with Verizon as part of an overhaul of its communications as a result of the United States government spying on German government officials' and citizens' cellphones.
Reports were obtained by Germany last October based on documents released by former U.S. National Security Agency contractor Edward Snowden that showed that the United States had conducted mass surveillance in Germany.
The German government had demanded talks with the US on a "no-spy" deal, but these collapsed after the US would not give the assurances Germany needed. Germany is a member of NATO and a US ally.
"The pressures on networks as well as the risks from highly-developed viruses or Trojans are rising," Germany's Interior Ministry said in a statement on Thursday.
"Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the U.S. National Security Agency (NSA) affair, show that the German government needs a very high level of security for its critical networks."
The German company Deutsche Telekom AG will replace services provided by Verizon, and also added that the German company is already providing services for the most sensitive communications between the government and German intelligence agencies.
According to reports and documents published last year, Verizon was obliged by U.S. intelligence to turn over international and domestic calling records of its customers.
Verizon is the 2nd U.S. telephone company behind AT&T Inc in terms of revenue.
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