Spain's 5G state subsidies may exclude Huawei, Huawei appeals

On October 10th, local time on Monday, Huawei appealed against the Spanish government's 5G national subsidy regulations because the regulations may cause Huawei to lose its eligibility for subsidies.

Spain has pledged more than 500 million euros ($527 million) in state aid to deploy 5G networks in rural areas of the country, but it has said it will exclude certain suppliers deemed "high risk." Huawei has filed an administrative appeal through its Spanish subsidiary, claiming that the exclusion of certain suppliers violates the law.

“The clause in question interferes with operators’ freedom to choose the best suppliers based on objective criteria reflecting commercial, technical and security requirements,” Huawei said in an emailed statement on Monday. “Instead, it seeks to exclude certain suppliers based on arbitrary political criteria.”

The regulations released by Spain show that equipment, components and related software in key elements of 5G networks "will not be purchased from suppliers designated as high risk in Spain." They also point out that operators that have already deployed 5G technology may be forced to replace equipment if suppliers are labeled as high risk.

Spain's Economy Ministry, which draws up the rules, has yet to draw up a list of banned suppliers and a spokesman for the ministry declined to comment.

The European Commission is stepping up pressure on member states to gradually replace equipment from Huawei and ZTE in their most advanced mobile networks after banning the two vendors in June.

As of December 2022, 38% of Spain's 5G networks will come from Chinese suppliers. This compares to 59% in Germany, 17% in France and 51% in Italy.

Just a month ago, Huawei appealed a 5G decision in Portugal, arguing that the Portuguese Cybersecurity Committee banned operators from using its equipment in the construction of 5G mobile networks.