Huawei ousted from heart of EU as Nokia wins Belgian 5G contracts
By Supantha Mukherjee and Mathieu Rosemain
STOCKHOLM / PARIS (Reuters) - Orange and Proximus have selected Nokia to help build 5G networks in Belgium as they drop Huawei under pressure from the US to exclude the Chinese company from supplying essential telecommunications equipment.
The moves are among the first by commercial operators in Europe to remove Huawei from next-generation networks and after months of diplomatic pressure from Washington to claim Huawei devices could be used by Beijing for spying.
The executive body and parliament of the European Union are located in the Belgian capital, Brussels, which is of particular concern to the US secret services.
"Belgium relies 100% on Chinese providers for its radio networks - and NATO and EU staff used cell phones to make calls on these networks," said John Strand, an independent Danish telecommunications consultant.
"The operators send a signal that it is important to have access to secure networks."
Huawei [HWT.UL], the world's largest provider of telecommunications equipment, strongly denies the allegations made by the US and has been extremely critical of calls to ban 5G contracts.
However, the company said on Friday that it had accepted the decisions made by Orange Belgium and Proximus, which confirm a Reuters report.
"This is the result of a tender organized by the operators and the result of the free market," said a Huawei spokesman.
"We welcome fair competition. The more diversified a supply chain, the more competitive it becomes," he said. Huawei has been supplying equipment in Belgium for more than a decade and its commitment has remained unchanged.
The agreements to supply two-way radios to Orange Belgium and Proximus are a boost for Nokia, which struggled to advance in the 5G market earlier this year, despite pressure on Huawei.
"I've been trying to become a RAN (Radio Access Network) supplier for Orange Belgium since 2003, when the company was still Mobistar. Now we're finally here," tweeted Tommi Uitto, President of Nokia Mobile Networks.
The companies did not provide a value for the contracts.
Nokia stock rose nearly 3% in early trading.
Orange Belgium and Proximus said Ericsson will deliver the core of their 5G networks, a smaller line of business.
EU members have intensified the examination of so-called high-risk providers. This puts Huawei's governance and technology under scrutiny and is likely to lead other European operators to remove them from their networks, analysts say.
Nokia and Ericsson have been the main beneficiaries of the challenges Huawei faces. From Bell Canada and Telus Corp in Canada to BT in the UK, Nordic companies have stolen market share from the Chinese company.
Separately, Nokia announced that it has won a contract to provide Telefonica UK with data management software to replace an unidentified existing provider.
(Reporting by Supantha Mukherjee in Stockholm, Mathieu Rosemain in Paris and Douglas Busvine in Berlin, additional reporting by Sudip Kar-Gupta and Benoit Van Overstraeten; editing by Jason Neely and Mark Potter)
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