Signs not looking positive for Huawei and ZTE in Italy

Reports in local press suggest Italy could be the next country to bow to pressure from the US, banning Huawei and ZTE from contributing to communications infrastructure.

Although many telcos across the bloc have been taking precautionary measures against Huawei and ZTE, Telecom Italia (TIM) has previously stated it would continue to work with the vendors until the government told it otherwise. This is a market which looked relatively safe for the both parties, but things are starting to look quite wobbly.

This is a largely unconfirmed report however Italy’s La Stampa newspaper has claimed the Defense Ministry and Ministry of Foreign Affairs is ready to bring out the ‘Golder Powers’ to enforce the ban. The ‘Golden Powers’ effectively give the government the power to do whatever it wants, and in this case will be applied to contracts allowing the government and telcos to exit without financial penalties from the vendors.

Security concerns have of course been cited as the reasoning, with the paper suggesting strong pressure from the US government. Italy currently has several US military bases across the country.

The US government has been on somewhat of a European road-trip over the last month, with Foreign Office officials meeting with counterparts in European governments to pitch the case of paranoia. Although little concrete evidence has been presented to support the accusation companies like Huawei are supporting the Chinese government’s espionage campaigns, Europe does seem to be turning against the vendor.

Italy might be the next domino to fall, though it seems to be in a race with Poland. Following the arrest of a Huawei employee in recent weeks on the grounds of corporate espionage it does look like the vendor (or potentially Chinese companies on the whole) will be banned from the country. This would be a huge decision to make though as Poland acts as the HQ for Huawei’s Eastern European business, employing roughly 900 people.

While there are countries which are resisting the calls to ban Chinese involvement in 5G infrastructure, Germany is one drafting rules to heighten security requirements and Huawei has seemingly ticked all the boxes in the UK, the power of the US lobby is proving effective. Of course, these battles in the individual nations are only part of the problem, the US delegation has been whispering in the ear of the European Commission in recent weeks. We all know the Brussels brunch brigade love a free lunch…

Following publication of the article, the Italian government released the following statement denying the reports:

With reference to the press articles on an alleged banning of Huawei and ZTE from Italy in view of the adoption of 5G, the Ministry of Economic Development denies any intention to take any initiative in this regard. National security is a priority, and in the event that critical issues arise – which is not the case until now – the Ministry will evaluate the opportunity to take the appropriate initiatives.