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

By Elvira Pollina and Supantha Mukherjee
MILAN (Reuters) - Telecom Italia has decided to keep Nokia as a supplier and reduce Huawei's stake in a proposed purchase of equipment to build a 5G network, three related sources told Reuters, under pressure the Chinese company excluded for security reasons.
The United States has championed Italy and other European allies to avoid the use of Huawei devices as it could pose a security risk - an indictment Huawei has denied. Italy has so far refused to completely ban Huawei.
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Former national phone company Telecom Italia (TIM) was considering sharing a radio access network (RAN) supply contract between Huawei and Swedish Ericsson as part of its 5G roll-out earlier this year, sources told Reuters.
The RAN infrastructure includes the base stations and antennas that connect smartphones to the cellular network and accounts for the majority of the cost of a new network.
Finnish Nokia, which was previously one of TIM's cellular access network providers, was said to miss the 5G RAN order, according to sources.
However, the agreement has since been reviewed.
"Ericsson will provide the majority of the devices, while Huawei and Nokia will each receive 20-25%," one of the sources said on Wednesday.
"Negotiations on issues such as the percentage reduction are still ongoing," another source said.
Huawei, TIM, Nokia and Ericsson declined to comment.
The original agreement that would have dropped Nokia was never made public.
Even in countries where there is no ban on Chinese companies, telecom operators are cautious about choosing Huawei, and government and industry sources said Rome has de facto passed a pro-US. Line when it is reviewing 5G deals and asking companies to diversify their 5G suppliers.
In July, TIM left Huawei following a tender for a contract for the supply of 5G devices for its core network, in which sensitive data is processed.
(Reporting by Elvira Pollina, Supantha Mukharjee; Editing by Elaine Hardcastle)

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