Spanish telecom operator Telefonica has extended its contract with Huawei to provide equipment for its 5G mobile core network for Spanish retail customers until 2030, according to a report by El Pais.

Telefonica also awarded Nokia a contract for its 5G core network for business and government services in early 2025.

Telefonica’s chief operating officer, Emilio Gayo, told Reuters that the company is reducing its reliance on Huawei equipment in Spain to align with European Union recommendations for telecom operators to phase out Huawei devices due to security concerns.

Huawei did not comment on the contracts.

While some European countries, such as Germany, have banned the use of Huawei equipment, Spain has not imposed similar restrictions.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Telecom operators adopt segmented vendor strategies to balance regulatory compliance with business continuity

Telefonica’s dual-vendor approach reveals how European telecom companies are navigating conflicting pressures around Chinese equipment suppliers.

The Spanish operator renewed its Huawei contract for retail customers while simultaneously awarding Nokia the contract for enterprise and government services1. This segmentation allows Telefonica to maintain existing infrastructure investments while addressing regulatory concerns about sensitive institutional networks.

The strategy reflects broader risk management practices where operators separate consumer-facing services from critical business and government communications infrastructure.

This approach provides operational flexibility as regulatory landscapes evolve, allowing companies to maintain service continuity while gradually adjusting their vendor mix based on changing compliance requirements.

2️⃣ European Huawei policies create a patchwork of compliance approaches across the continent

Spain’s measured approach to Huawei contrasts with more aggressive restrictions elsewhere in Europe, creating uneven competitive dynamics across the region.

While Germany has mandated complete removal of Huawei and ZTE components from 5G networks by 2026, and Sweden required removal by January 2025, Spain has avoided outright bans2.

Eleven EU countries have implemented legal measures to restrict high-risk suppliers, but enforcement and timelines vary significantly2. This fragmented approach allows companies like Telefonica to continue using Huawei equipment in some markets while phasing it out in others.

The geographic variation extends globally, with Telefonica planning to continue using Huawei in Latin America where no restrictions exist3. This regional flexibility enables telecom operators to optimize their vendor relationships based on local regulatory environments rather than adopting uniform global policies.

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