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Portugal won’t compensate telcos for replacing “high-risk” equipment

Portugal will not compensate telecoms operators for any Huawei or other equipment they may have to swap as a result of a recent decision barring suppliers representing high-security risk from their 5G mobile networks, a top official told Reuters.

Mario Campolargo, the secretary of state for digitalisation, said the cybersecurity council CSSC’s decision in May was based on an independent, strict security assessment following European Union guidelines and was not directly aimed at banning Chinese suppliers such as Huawei.

Europe and the U.S. have concerns that Chinese involvement in critical infrastructure could compromise security. Beijing and Huawei reject such suggestions.

The CSSC is the prime minister’s consultative body and its deliberation was seen as another blow to efforts by Huawei to enter standalone networks in the 5G market in Portugal and extend existing contracts.

The official said “there may be also an indirect implication of these security criteria on 4G networks”, on which 5G networks are still largely based, but the CSSC was sounding out operators about any difficulties or challenges with that.

Under a law approved last August, Portugal can determine “the exclusion, restrictions on use, or the cessation of use of equipment or services” of telecom companies for security reasons, setting criteria and deadlines for operators to comply.

The Security Assessment Commission created within the scope of the CSSC has over the past nine months assessed the security aspects of all existing equipment in Portugal, regardless of “technology, merit or quality”, and applied the criteria of the EU 5G security toolbox.

It “will take into account an acceptable balance between security and the investments that were made by the operators,” said Campolargo, who reports directly to the prime minister and chairs the CSSC.

“Because there is this balance between security and the operators’ return on investment, Portugal does not consider compensating them for replacing equipment,” he said.

Portugal’s telecoms market regulator ANACOM will be in charge of implementing the deliberation and deadlines would be established on a case-by-case basis, he said.

Asked if the deliberation was aimed at Chinese suppliers such as Huawei, he said: “Of course not”.

The commission had warned of a “high risk” to security of networks involving 5G technology “from suppliers or providers that are headquartered in a country where the government exercises control, interference or pressure on its activities in third countries”. It also cited risks when the country is not an EU, NATO or OECD member.

Portugal’s main operators, Altice, NOS and Vodafone have already said they would not use Huawei’s equipment in 5G core networks.

Campolargo expected no impact on Sino-Portuguese relationship or Chinese investment after Portugal clarified that the decision was part “of a broader process at European level and that it is a transparent and known process”. Reuters

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