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Sources suggest that the Telecom Italia, one of Huawei’s last major allies in Europe, may be looking to cut ties with the Chinese vendor for 5G
According to sources, Italy’s largest mobile operator TIM has sent Huawei a letter cancelling their contract for 5G equipment.
The move reportedly comes following a review of TIM’s supply policy, including a cost and benefit analysis, suggested one of the sources.
According to reports from last year, TIM had initially planned on splitting its 5G equipment needs between Huawei and Ericsson, but later brought in Nokia as well, in what seemed like a tripartite ecosystem.
In hindsight this addition may have been done, at least in part, as preparation for cancellation of their Huawei 5G contract.
While the Italian government has refused to issue an outright ban on Huawei technology, it has nonetheless sought to indirectly minimise the company’s presence in the country when it comes to 5G. In October last year, the government said that Huawei would be excluded from the core of the country’s 5G networks, but insisted the decision was not politically driven.
Three months later, the government vetoed a deal between Huawei and Fastweb, arguing that Fastweb was too reliant on the Chinese vendor and should diversify its supply chain.
Under legislation passed last year, the government has been granted special vetting powers over 5G supply deals involving non-EU vendors, which may have had a role to play in TIM’s decision.
For Huawei, the loss of TIM would be a tough pill to swallow. The Italian incumbent is one of Huawei’s last major customers in Europe, after the last year saw operators throughout the European market gradually distance themselves from the vendor.
This news also arrives as the new Italian government’s focus on the country’s connectivity infrastructure is growing stronger than ever. Earlier this month the government said that they would increase the amount of fund money allocated to broadband, 5G, and satellite infrastructure as part of the country’s pandemic recovery plan from €4.2 billion to €6.7 billion.
How would Huawei’s exclusion from Italy’s 5G networks affect the telecoms industry? Find out at this year’s Connected Italy conference. For more information, contact Rob Chambers at rob.chambers@totaltele.com
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