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* Nokia wins 5G contracts with Orange Belgium, Proximus
* U.S. official welcomes the news
* Nokia shares up 3%
(Adds U.S. official quote, details on Telenet)
By Supantha Mukherjee and Mathieu Rosemain
STOCKHOLM/PARIS, Oct 9 (Reuters) - Orange and
Proximus have picked Nokia to help build 5G
networks in Belgium as they drop Huawei amid U.S. pressure to
exclude the Chinese firm from supplying key telecoms equipment.
The moves are among the first by commercial operators in
Europe to drop Huawei from next-generation networks and come
after months of diplomatic pressure from Washington, which
alleges Huawei equipment could be used by Beijing for spying.
The Belgian capital Brussels is home to the NATO alliance
and the European Union's executive and parliament, making it a
matter of particular concern for U.S. intelligence agencies.
"Belgium has been 100% reliant on Chinese vendors for its
radio networks - and people working at NATO and the EU were
making mobile phone calls on these networks," said John Strand,
an independent Danish telecoms consultant.
"The operators are sending a signal that it's important to
have access to safe networks."
The United States welcomed the decisions by Orange Belgium
and Proximus, which have a network sharing agreement.
"This is the latest example of evaporating Huawei deals and
further confirmation of this worldwide momentum towards trusted
vendors," said Keith Krach, the U.S. undersecretary at the State
Department for economic growth, energy and the environment.
Huawei, the world's biggest telecoms equipment
supplier, strongly denies the U.S. allegations and has been
highly critical of calls to ban it from 5G contracts.
However, it said on Friday it accepted the decisions by
Orange Belgium and Proximus, which confirmed an earlier Reuters
exclusive.
"This is the outcome of a tender organised by operators and
the result of the free market," a Huawei spokesman said.
"We embrace fair competition, the more diversified a supply
chain the more competitive it becomes," he said, adding Huawei
had been supplying equipment in Belgium for more than a decade
and its commitment remained unchanged.
The decisions leave Liberty Group's Telenet as the
only mobile carrier in Belgium yet to say which supplier it will
use for its next mobile networks. Telenet currently relies on
equipment made by China's ZTE, and plans to announce
its 5G decision in the first half of 2021, a spokeswoman said.
CLOSER SCRUTINY
The deals to supply radio gear to Orange Belgium and
Proximus are a boost for Nokia, which struggled to make headway
in the 5G market earlier this year even as Huawei was under
pressure.
"I have tried to become RAN (radio access network) supplier
to Orange Belgium since 2003 when the company was still
Mobistar. Here we are, finally," tweeted Tommi Uitto, president
of Nokia Mobile Networks.
The companies did not disclose a value for the contracts.
Nokia shares were up 3% in afternoon trading.
Orange Belgium and Proximus said Ericsson would
supply the core of their 5G networks, a smaller slice of
business.
EU members have been stepping up scrutiny of so-called
high-risk vendors. This subjects Huawei's governance and
technology to critical examination and is likely to lead other
European operators to strip it from their networks, analysts
say.
Nokia and Ericsson have been the main beneficiaries of the
challenges facing Huawei. From Bell Canada and Telus
Corp in Canada to BT in Britain, the Nordic
companies have been grabbing market share from the Chinese firm.
Separately, Nokia said it had won a contract to provide data
management software to Telefonica UK, which said the Finnish
firm would replace the less than 1% of Huawei kit in its
network.
(Reporting by Supantha Mukherjee in Stockholm, Mathieu Rosemain
in Paris, Douglas Busvine in Berlin and Humeyra Pamuk in
Washington D.C., additional reporting by Foo Yun Chee, Sudip
Kar-Guptaadn Benoit Van Overstraeten; editing by Jason Neely and
Mark Potter)
