Science & Technology

Huawei Challenges 5G State Aid Rules in Spain

Huawei Technologies has published the rules of the Spanish government, the complexity of compliance with which may become a barrier for this Chinese equipment manufacturer to become a competitive applicant for state aid.

Huawei Challenges 5G State Aid Rules in Spain

Spain has announced its intention to allocate financial resources in the amount of more than €500 million ($527 million) for the development of a 5G network in rural areas. At the same time, the leadership of this country stated that some suppliers of equipment necessary for the implementation of the mentioned project are high-risk and for the appropriate reason will be excluded from the list of applicants for participation in the technology initiative.

Huawei, based in the Chinese city of subprovincial significance of Shenzhen, located in Guangdong Province in the south of the country, believes that the position of the Spanish government regarding suppliers classified as those with whom it is not desirable to cooperate is illegal, disproportionate and was formed on the basis of political bias. The company filed an administrative appeal through its Spanish unit.

The official statement of the Chinese manufacturer on this issue claims that the concept of the Spanish government’s actions within the framework of the 5G network development project restrict the freedom of operators to choose the best provider. The company also notes that in such cases, in order to choose firms with which to cooperate, only objective criteria should be taken into account, including compliance with commercial and technical requirements, and the ability to provide the necessary level of security. The manufacturer notes that the Spanish government, instead of following justified practices, excludes the possibility of interaction with suppliers, focusing on arbitrary political considerations.

The regulations approved in Spain specify that equipment, components, and related software in critical elements of 5G networks will not be purchased from those companies that have been classified as high-risk. The local government also stated that those operators who started cooperating with the so-called undesirable firms and implemented their technology may be forced to replace the equipment.

The Spanish Ministry of Economy will soon compile a list of suppliers whose interaction is prohibited. A representative of this department, in response to a media request for comments on restrictions in the sphere of cooperation, did not provide any information.

The European Commission has stepped up measures to put pressure on the EU member states to implement a strategy of phasing out the use of products and technologies from Huawei and ZTE, a Chinese company producing telecommunications equipment and mobile phones, in advanced mobile communication networks. As part of these actions, Asian suppliers were banned from accessing internal systems in Europe in the summer.

Germany and Spain are EU member states dependent on Chinese equipment at a level that is defined as unacceptable in this bloc of countries. Strand Consult data indicates that as of December 2022 in Spain, 38% of the 5G network was provided by a supplier from China. In Germany, this figure is 59%. In Italy and France, the level of dependence on Chinese suppliers is 51% and 17%, respectively.

A month ago, a Chinese telecommunications company filed an appeal in Portugal against the decision of the cybersecurity council of this country, which implemented a ban on the use of its equipment in the construction of 5G mobile networks.

As we have reported earlier, US Finds Huawei’s Inability to Mass Produce Advanced Phone Chips.