The Italian subsidiary of British telecoms group Vodafone has received conditional approval from the Italian government to use equipment made by Chinese telecoms giant Huawei in its 5G wireless access network, two people familiar with the matter said, according to Reuters.
Italy can block deals involving non-EU suppliers or impose strict conditions on transactions under the so-called “golden powers” (golden powers) law on foreign direct investment. Since 2012, Italy has used the “golden powers” three times to prevent foreign investment in industries considered to be of strategic importance.
One of the two sources told Reuters that on May 20, the Draghi-led Italian national unity government approved the deal between Vodafone and Huawei. The two sources asked not to be named because of the sensitivity of the matter.
As with similar deals, the government imposed a series of conditions, including restrictions on Huawei’s ability to fix technical glitches through remote intervention, and set extremely high security thresholds, the sources added.
Both Vodafone and Huawei declined to comment, Reuters said.
The U.S. has lobbied Italy and other European allies not to use Huawei equipment in next-generation telecoms networks and is closely scrutinizing another Chinese telecoms giant, ZTE (ZTE). Washington says these Chinese companies could pose a security risk.
Huawei and ZTE strongly deny the allegations.
Over the past 12 months, Italy has taken a tougher stance against Huawei, but has not completely banned the use of Huawei equipment in its 5G infrastructure.
Under former Prime Minister Antonio Conte, Rome had blocked Italian telecoms group Fastweb from signing a deal with Huawei in October to supply equipment for its 5G core network, which handles highly sensitive data.