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Vodafone Group Plc (NASDAQ:VOD) Suspends Huawei Deployment in Its Core Network

Vodafone Group Plc (NASDAQ:VOD) is trading close to its lows, gained simply 1.18% in the last trading session. One of the recent controversy behind the company is discussed here.

Vodafone has decided to hold off the use of Huawei equipment in its core network in Europe as the debate about the security concerns which involve the Chinese telecoms giant remain unclear.

Increasing Scrutiny over Huawei

The decision by Vodafone to pause deploying Huawei equipment in its core network is just the latest blow for the Chinese telecoms giant, which is under increasing scrutiny as various governments continue to grow their concerns that Chinese spies could use Huawei technology.

According to Nick Read, chief executive of Vodafone, they will continue buying equipment from Huawei as they continue building their 4G and 5G networks, but they would halt to use the giant telecom supplier in its core network in Europe where the data is concentrated as well as security concerns highest.

Huawei, however, has been quick to deny the allegations that the government of China could use its kit in spying on the users. Besides, it actively maintains that its products entirely do not pose any security risk leave alone having ties with the Chinese government.

Several Countries Blocking Huawei Equipment

Several countries have blocked Huawei equipment such as the US, New Zealand and Australia from being used in the radio access market. According to Read, the ban on the radio for the whole industry would result in a significant financial cost as well as customer disruption and possibly delaying the launch of 5G in several countries.

Later this year, Vodafone is planning to launch the 5G services in various markets, including the UK. Nevertheless, Read said that the move by Vodafone was not a result of political or government pressure but merely an overall ‘unhealthy level of noise’ surrounding the Huawei issue.

The move by Vodafone followed a decision by BT Group to rip Huawei equipment out of the UK mobile network. Huawei has been on the lookout for a technological edge over the European rivals Nokia Oyj (NYSE:NOK) and Ericsson AB for 5g technology, but those efforts seem to be under a severe threat in Europe where countries are reviewing their policies. Only time will tell whether the shifting winds affecting Huawei will come to an end.

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