Italian govt approves Vodafone’s use of Huawei 5G RAN kit

Huawei’s future prospects in Italy may not be as dark as once feared, with reports suggesting that Vodafone’s Italian unit has been cleared by the government to use Huawei equipment for its 5G RAN network.

 

According to sources, the deal was authorised by the Italian government on the 20th of May and is subject to various restrictions. These limitations include restrictions on remote intervention by Huawei staff and increased security, suggest the sources.

 

Italy’s relationship with Huawei over the past couple of years has been a difficult one. Throughout 2020, the US went on a charm offensive throughout Europe, driving governments to restrict Huawei from 5G networks based on national security fears. These discussions proved fruitful in various countries, including the UK, which banned Huawei from their networks completely. Italy itself proved receptive to US overtures, with then-foreign minister Luigi Di Maio telling the US ambassador Mike Pompeo that Italy was “fully aware of the importance of ensuring the security of 5G networks”. 

 

Nonetheless, with Huawei playing a major role in the infrastructure of a number of Italian operators, the government shied away from issuing a complete ban. Instead, in October 2020 it suggested that Huawei be prohibited from the core of the country’s 5G networks, insisting that the decision was not politically driven, an argument that Huawei accepted. 

 

Three months later, however, it vetoed a proposed deal between Huawei and Fastweb, arguing that it would have left Fastweb too reliant on the Chinese vendor and asking that the operator diversify its supply chain. 

 

This interventional highlighted a fact that has overshadowed the decision process surrounding Huawei for the operators, the Italian government’s so-called ‘golden powers’. These special measures allow the government to intervene in deals involving foreign investment into sectors that the government deems to be of strategic importance, thus could undermine any deals struck between network operators and vendors like Huawei or ZTE.

 

By April 2021, reports were suggesting that Italy’s biggest mobile operator, TIM, had sent a letter to Huawei cancelling their contract for 5G equipment. 

 

Now, the permission reportedly granted by the government to Vodafone could indicate a more flexible stance from the new government of Mario Draghi. 

 

This news comes alongside reports that Malaysia could also lean towards Huawei for its 5G network, with Kian Ming Ong, who served as Malaysia’s deputy minister of international trade and industry until last year, saying there was “no concrete proof” that Huawei represented a security risk. He further suggested that it was likely Huawei would be selected as the primary vendor for the country’s burgeoning single wholesale network.