Portugal moves closer to banning Chinese suppliers from 5G

© Reuters. FILE PHOTO: An advertising board is seen during the first demonstration of the technology 5G in Lisbon, Portugal June 4, 2018. REUTERS/Rafael Marchante

By Sergio Goncalves

LISBON (Reuters) - Portugal's cybersecurity council CSSC has issued a resolution that could formally bar telecom operators from using Chinese equipment in their high-speed 5G mobile networks as well 4G platforms on which the new technology is based.

The CSSC is the prime minister's consultative body and its document, dated May 23, is another blow to efforts by Chinese technology giant Huawei to enter the 5G market in Portugal and possibly extend existing contracts.

Under a law approved last August, the government can determine "the exclusion, restrictions on use, or the cessation of use of equipment or services" of telecom companies, setting conditions and deadlines for operators to comply.

The government had no immediate comment.

The country's main operators, Altice, NOS and Vodafone (LON:VOD) have already said they will not use Huawei's equipment in 5G core networks, amid European and U.S. concerns that Chinese involvement in critical infrastructure could compromise security. Beijing and Huawei reject such suggestions.

Portugal's existing 5G networks are not standalone and still largely based on 4G technology and equipment.

Without mentioning China or any Chinese suppliers by name, the CSSC warned of a "high risk" to security from suppliers or providers that "are headquartered in a country where the government exercises control, interference or pressure on its activities in third countries".

Its opinion is based on an undisclosed report that evaluated the safety of equipment in public electronic communications networks involving 5G technology.

It also cited security risks when the country where a supplier is based has no agreements on data protection, cybersecurity or protection of intellectual property with Portugal or the European Union, or when it is not an EU, NATO or OECD member.

Huawei said in a statement it had "no prior knowledge of, and hasn't been consulted about this matter" and it was still gathering information "on the nature of the assessment" and hoped to continue serving Portuguese clients.

Europe has emerged as a battleground in the technology rivalry between Beijing and Washington and Huawei's European competitors, Ericsson (BS:ERICAs) and Nokia (HE:NOKIA), could become a supplier duopoly if the Chinese company were shut out.