Three sources told Reuters on April 29 that Telecom Italia is planning to cancel a contract to let Huawei participate in the construction of 5G in Italy.
The newspaper noted that Telecom Italia is one of Huawei’s largest customers in Europe, and losing the 5G contract to Telecom Italia would be a blow to the company, which has already lost some business to rivals Nokia and Ericsson. The U.S., under the Trump administration, has been persuading allies not to use Huawei technology in critical communications networks because of security concerns. The company, for its part, has vehemently denied the security allegations. So far, the U.K. and Sweden have directly announced bans on the use of the company’s equipment in Europe.
Previously, the Italian government had blocked Swisscom’s Italian subsidiary Fastweb from reaching a supply agreement with Huawei for the most sensitive parts of its 5G mobile network in October last year. “The government vetoed the move and asked Fastweb to diversify its suppliers,” a senior government source said. In connection with this latest move, a source revealed that Telecom Italia has sent a letter to Huawei informing it of its intention to cancel the contract with Huawei. Italian newspaper Il Sole24 Ore was the first to report the contents of the letter. Telecom Italia and Huawei declined to comment.
The sources had told Reuters last December that Telecom Italia’s initial plan was to give the contract to Huawei and Ericsson, but later brought in Nokia to share the contract among the three companies. Now the entire contract will be split equally between the two companies, Ericsson and Nokia, according to the latest update from two sources. The Italian government has not banned Huawei outright, but current legislation requires the government to set strict conditions on 5G contracts with non-EU suppliers. Sources noted that Telecom Italia has ruled out Huawei’s participation in the construction of the core of its 5G network, and did not invite Huawei to participate in the tender last year.
Italy’s new Prime Minister Mario Draghi told the media on the 8th of this month that his government had blocked a Chinese company’s takeover of an Italian semiconductor company and said he supported expanding state protection for Italian companies.
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