By Foo Yun Chee
BRUSSELS (Reuters) - EU countries can restrict or exclude high-risk 5G providers from core parts of their telecoms networks, new EU guidelines show, dealing a potential blow to China's Huawei Technologies [HWT.UL].
The non-binding recommendations, set out in an EU document seen by Reuters, are part of a set of measures aimed at addressing cybersecurity risks at national and EU-wide level, in particular concerns related to China's Huawei, though they do not identify any particular country or company.
The document, which lays out guidelines agreed by EU member states, warned of the risks of interference by a third country in the 5G supply chain, as well the risk of depending on a single supplier, to justify a tough line.
EU countries should assess the risk profile of suppliers on a national or EU level and apply restrictions on high risk suppliers including necessary exclusions to effectively mitigate risks for key assets, the document says.
EU governments will also be advised to diversify their suppliers and not depend on one company and to use technical and non-technical factors to assess them.
While the guidelines did not mention any individual company or country, they have been drawn up as European countries face pressure from the United States to ban Huawei equipment on concerns that its gear could be used by China for spying.
Huawei, which competes with Finland's Nokia (HE:NOKIA) and Sweden's Ericsson (BS:ERICAs), has denied it could be used for spying.
The guidelines also advise EU countries to set up a legal or regulatory framework to control the use of outsourced suppliers and their access to critically sensitive parts of the telecoms infrastructure.
EU governments should also audit telecoms operators, require them to provide detailed data on their sourcing of 5G equipment and describe how they implement baseline technical network security measures, the document says.
EU digital economy chief Margrethe Vestager is expected to announce on Jan. 29 the next steps going forward. The bloc sees 5G networks as key to economic growth.
EU members such as Germany are split on whether to allow Huawei access to their 5G networks, with Chancellor Angela Merkel preferring to apply the same rules to all equipment vendors in the face of growing resistance from lawmakers in her own party.
Huawei has garnered support among Europe's telecoms industry, including from Deutsche Telekom (DE:DTEGn), Vodafone (LON:VOD) and Telefonica (MC:TEF) which are all Huawei clients.