Portugal refuses compensation for Huawei 5G equipment swap

In a recent decision, Portugal has stated that it will not compensate telecoms operators for replacing Huawei or any other high-security risk equipment from their 5G mobile networks. The move comes after the country’s cybersecurity council, CSSC, made a decision in May to bar suppliers posing high-security risks from their 5G networks, Reuters news report said.
Huawei 5G antennaThe CSSC’s decision was based on an independent and rigorous security assessment, adhering to European Union guidelines. It was not specifically targeted at banning Chinese suppliers like Huawei. However, both Europe and the U.S. have expressed concerns over Chinese involvement in critical infrastructure, fearing potential security compromises. In response, Beijing and Huawei have strongly denied any such allegations.

The CSSC serves as the prime minister’s consultative body and its recent deliberation has dealt a blow to Huawei’s efforts to establish standalone networks in Portugal’s 5G market and extend existing contracts.

Mario Campolargo, secretary of state for digitalization, clarified that while the decision primarily affects 5G networks, there might be indirect implications on 4G networks since 5G networks largely build upon the existing 4G infrastructure. However, the CSSC will engage with operators to address any difficulties or challenges that may arise.

The Security Assessment Commission, formed within the CSSC, has spent the last nine months evaluating the security aspects of all existing telecom equipment in Portugal. The assessment followed the criteria outlined in the EU 5G security toolbox. Campolargo, who chairs the CSSC and reports directly to the prime minister, assured that the commission would consider a balance between security concerns and the operators’ investments. Consequently, Portugal does not intend to compensate telecoms operators for replacing equipment.

Last August, a law was approved in Portugal, granting the country the authority to exclude or restrict the use of equipment or services from telecom companies on security grounds. The law also provides criteria and deadlines for operators to comply.

The responsibility for implementing the CSSC’s decision lies with Portugal’s telecoms market regulator, ANACOM. Deadlines for compliance will be determined on a case-by-case basis.

Mario Campolargo emphasized that the CSSC’s deliberation was not aimed at Chinese suppliers, such as Huawei, but rather focused on addressing security concerns in the context of a broader European process. The commission had previously highlighted the “high risk” to security when 5G networks involve suppliers headquartered in countries where the government exercises control, interference, or pressure on activities in third countries. Additionally, risks were identified when the country in question is not a member of the EU, NATO, or OECD.

Major telecom operators in Portugal, namely Altice, NOS, and Vodafone, had already made public commitments not to use Huawei’s equipment in their 5G core networks.

Mario Campolargo expressed confidence that the decision would not have a negative impact on the Sino-Portuguese relationship or Chinese investment in Portugal, as the country clarified that the process was part of a transparent and well-known European initiative.