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Italy approves use of special powers over 5G supply deals

Key Points
  • The measure was adopted under a law passed by the previous government in July to broaden powers Rome has over companies of national interest.
  • The United States has lobbied Italy and other European allies to stay clear of Huawei equipment and to also pay close scrutiny to ZTE, saying the vendors could pose a security risk. Both companies have strongly denied any such risk.
A Huawei logo is pictured at their store at Vina del Mar, Chile July 18, 2019.
Rodrigo Garrido | Reuters

Italy's new government on Thursday approved its use of special powers in supply deals for fifth-generation (5G) telecom services by a number of domestic firms with providers including China's Huawei and ZTE.

The measure was adopted under a law passed by the previous government in July to broaden powers Rome has over companies of national interest.

A government source told Reuters at the time the decision to strengthen Rome's so-called "golden powers" reflected concerns over the potential involvement of Chinese equipment makers Huawei and ZTE in the development of 5G networks.

The United States has lobbied Italy and other European allies to stay clear of Huawei equipment and to also pay close scrutiny to ZTE, saying the vendors could pose a security risk. Both companies have strongly denied any such risk.

The new government, sworn in on Thursday, said in a statement it had imposed "conditions and requirements" in relation to purchases of goods and services for 5G networks made by Vodafone's Italian unit. It gave no further details.

It also imposed undisclosed requirements on accords between Wind Tre, a unit of CK Hutchison, and Huawei — the first time Italy's special powers over 5G networks have affected the Chinese firm.

Italy also said it would exercise special powers over Fastweb's purchases of radio components from ZTE, supply deals signed by Linkem and accords agreed by former incumbent Telecom Italia for systems that could adopt 5G technologies.

The companies involved were either not immediately available or declined to comment, saying they had not yet received any communication from the government.