Telefonica Renews Huawei 5G Core Deal in Spain Until 2030 Amid EU Pressure

Spanish telecom operator Telefonica renewed a major contract with Huawei in late 2024 to supply and manage the 5G core network equipment for residential customers in Spain until 2030, despite ongoing pressure from the European Union to reduce reliance on Huawei due to security concerns. The deal, signed under former CEO José María Álvarez-Pallete, covers only the consumer segment; corporate and public administration 5G core contracts have been awarded to Nokia, which helps address some regulatory and security scrutiny. Huawei emphasized that its contracts are confidential and that certain parts of its 5G core technology, such as the user plane and network operation center, face no regulatory restrictions, asserting its long-standing compliance with Spanish cybersecurity standards. Telefonica's COO Emilio Gayo has publicly stated the company is reducing Huawei exposure in line with EU guidelines, but the renewal indicates a more complex and nuanced approach behind the scenes, influenced partly by Huawei's competitive pricing. Spain differs from other European countries like Germany, which have imposed outright bans on Huawei, and the Spanish government holds a significant stake in Telefonica, adding political dimensions to the decision. The European Commission has expressed concern over Huawei contracts in Spain, but Telefonica continues to balance regulatory compliance, cost considerations, and operational needs in its 5G network management.