Portugal won't compensate telcos for replacing "high-risk" equipment

Nos SGPS SA

26/07/2023 16:15

By Sergio Goncalves
       LISBON, July 26 (Reuters) - Portugal will not compensate
telecoms operators for any Huawei or other equipment they may
have to swap as a result of a recent decision barring suppliers
representing high-security risk from their 5G mobile networks, a
top official told Reuters.
    Mario Campolargo, the secretary of state for digitalisation,
said the cybersecurity council CSSC's decision in May was based
on an independent, strict security assessment following European
Union guidelines and was not directly aimed at banning Chinese
suppliers such as Huawei  HWT.UL .
    Europe and the U.S. have concerns that Chinese involvement
in critical infrastructure could compromise security. Beijing
and Huawei reject such suggestions.
    The CSSC is the prime minister's consultative body and its
deliberation was seen as another blow to efforts by Huawei to
enter standalone networks in the 5G market in Portugal and
extend existing contracts.
    The official said "there may be also an indirect implication
of these security criteria on 4G networks", on which 5G networks
are still largely based, but the CSSC was sounding out 
operators about any difficulties or challenges with that.
    Under a law approved last August, Portugal can determine
"the exclusion, restrictions on use, or the cessation of use of
equipment or services" of telecom companies for security
reasons, setting criteria and deadlines for operators to comply.
    The Security Assessment Commission created within the scope
of the CSSC has over the past nine months assessed the security
aspects of all existing equipment in Portugal, regardless of
"technology, merit or quality", and applied the criteria of the
EU 5G security toolbox.
    It "will take into account an acceptable balance between
security and the investments that were made by the operators,"
said Campolargo, who reports directly to the prime minister and
chairs the CSSC.
    "Because there is this balance between security and the
operators' return on investment, Portugal does not consider
compensating them for replacing equipment," he said. 
    Portugal's telecoms market regulator ANACOM will be in
charge of implementing the deliberation and deadlines would be
established on a case-by-case basis, he said.   
    Asked if the deliberation was aimed at Chinese suppliers
such as Huawei, he said: "Of course not".
    The commission had warned of a "high risk" to security of
networks involving 5G technology "from suppliers or providers
that are headquartered in a country where the government
exercises control, interference or pressure on its activities in
third countries". It also cited risks when the country is not an
EU, NATO or OECD member.
    Portugal's main operators, Altice, NOS  NOS.LS  and Vodafone
 VOD.L  have already said they would not use Huawei's equipment
in 5G core networks.
    Campolargo expected no impact on Sino-Portuguese
relationship or Chinese investment after Portugal clarified that
the decision was part "of a broader process at European level
and that it is a transparent and known process".
        

 (Reporting by Sergio Goncalves; editing by David Evans)
 ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters
Messaging: sergio.goncalves.reuters.com@reuters.net))