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Telecom Italia to retain Nokia as supplier, curbing Huawei's share of 5G radio network - sources

Wed 23rd December, 2020 11:43am
By Elvira Pollina and Supantha Mukherjee
    MILAN, Dec 23 (Reuters) - Telecom Italia  TLIT.MI  has
decided to retain Nokia  NOKIA.HE  as a supplier and reduce
Huawei's  TLIT.MI  share of a planned purchase of equipment for
building a 5G network, three sources close to the matter told
Reuters, amid pressure to exclude the Chinese firm on security
concerns.
    The United States has lobbied Italy and other European
allies to avoid using Huawei's equipment alleging it could pose
a security risk - a charge Huawei has rejected. Italy has so far
declined to ban Huawei outright.
    Former national phone company Telecom Italia (TIM) at the
beginning of this year was considering dividing a supply
contract for the radio access network (RAN) part of its 5G
build-out between Huawei and Sweden's Ericsson  ERICb.ST ,
sources told Reuters.
    The RAN infrastructure includes the base stations and
antennas that connect smartphones to the mobile network, and
accounts for the bulk of the cost of a new network.
    Finland's Nokia - which has previously been among TIM's
mobile radio access network equipment suppliers - was set to
miss out on the 5G RAN order, according to the sources.
    But the agreement has since been reviewed.
    "Ericsson will provide the bulk of the equipment, while
Huawei and Nokia will get a 20-25% each", one of the sources
said on Wednesday. 
    "The negotiations are still going on about issues including
the percentage of reduction," another source said.
    Huawei, TIM, Nokia and Ericsson all declined to comment.
    The initial agreement which would have seen Nokia dropped
was never publicly disclosed.
    Even in countries where there is no ban on Chinese
companies, telecom operators are wary of selecting Huawei and
government and industry sources said Rome has de facto adopted a
pro-U.S. line when it scrutinises 5G deals and urges companies
to diversify their 5G suppliers.
    In July, TIM left Huawei out of an invitation to tender for
a contract to supply 5G equipment for its core network, where
sensitive data are processed.  urn:newsml:reuters.com:*:nL8N2EG5U9


 (Reporting by Elvira Pollina, Supantha Mukharjee;Editing by
Elaine Hardcastle)
 ((elvira.pollina@thomsonreuters.com;))
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