Citing national security concerns, the Italian government of prime minister Giuseppe Conte vetoed a 5G deal between Italian telecom firm Fastweb S.p.A. and China's Huawei Technologies Co., Ltd. Fastweb had picked Huawei as the sole supplier for its 5G core network.
It's the first time Italy has rejected a supply deal over 5G core networks with Huawei. The veto, which was made at a cabinet meeting late Thursday, prevents Huawei from supplying equipment for Fastweb's 5G core network.
It provides landline, broadband Internet, and IPTV services. The company is fully owned by the Swiss telecommunication company, Swisscom AG.
Conte's government used its special vetting powers to prevent Fastweb from implementing a supply deal with Huawei in the most sensitive part of its 5G mobile network.
"The government has vetoed the operation, asking Fastweb to diversify its suppliers," said a senior government to Reuters.
A source at Conte's office said the government also wants to determine if Huawei can play a role in building Italy's 5G core networks.
Amid U.S. pressure, Italy has imposed measures on Italian firms using Huawei equipment on their 5G networks. These measures include restrictions on interventions to fix technical glitches and a very high-security threshold.
Telecommunications companies operating in Italy have also introduced get-out clauses in 5G deals with Huawei to permit them to withdraw should Italy ask for costly requirements in exchange for its green light. The Trump administration has identified Huawei as a threat to Italy's national security.
Political analysts said the rejection clearly indicates Italy's tougher stance against Huawei, which has fallen out of favor with many European governments due to its spying links to the Chinese communist government
Huawei strongly rejects the espionage charges. Its Italian unit said it's ready to undergo any investigation to show its technology is safe and not compromised by spying equipment.
Huawei's rejection by Fastweb is the latest blow to its 5G operations in Italy. In early July, Telecom Italia (TIM), Italy's biggest phone group, didn't invite Huawei to tender for a contract to supply 5G equipment for core networks it intends to build in Italy and Brazil.
A Telecom Italia executive said Huawei's exclusion from the current tender is "part of our suppliers' diversification policy."
Some U.S. allies such as the United Kingdom have announced bans on Huawei, especially its 5G equipment, in future telecoms infrastructure.
