Spanish Government Terminates Contract with Telefonica Over Huawei Equipment Usage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 29 2025
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Should l Buy ?
Source: Reuters
Cancellation of Contract
- Reason for Cancellation: The Spanish government has cancelled a €10 million ($11.7 million) fibre-optic service contract with Telefonica due to concerns over the use of equipment from Huawei, citing reasons related to digital strategy and strategic autonomy.
- Impacted Institutions: The contract was intended to provide fibre-optic connections to various government institutions, including the Defence Ministry.
Telefonica's Position
- Company's Response: A spokesperson for Telefonica declined to comment on the cancellation.
- Reduction of Huawei Exposure: Telefonica's Chief Operating Officer, Emilio Gayo, indicated that the company is actively reducing its reliance on Huawei equipment in Spain, aligning with EU recommendations to phase out such devices due to security concerns.
Context of Huawei Equipment in Europe
- European Stance: While some European nations, like Germany, have implemented outright bans on Huawei equipment, Spain has not yet taken such measures and is reportedly still using some Huawei devices for its retail 5G mobile network.
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
