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Vodafone Halts Purchase Of Huawei Equipment

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Vodafone Group plc (VOD,VOD.L) said Friday it is suspending the purchase of components made by Chinese tech giant Huawei Technologies Co. Ltd. for its core telecom networks. The announcement marks the latest setback for Huawei amid worries that the company's telecom equipment poses security risks.

Vodafone said it will "pause" the purchase of Huawei gear for use in its 5G networks amid uncertainty over whether some governments in Europe will ban the Chinese company.

"Given that, we have decided to pause further Huawei in our core whilst we engage with the various agencies and governments and Huawei just to finalise the situation, of which I feel Huawei is really open and working hard," Chief Executive Officer Nick Read said.

Read added that the suspension of Huawei equipment purchases would affect only its European networks, though his company uses Huawei equipment in Spain and other smaller markets.

Several countries, including the U.S., Japan, Australia and New Zealand, have already banned Huawei from supplying equipment for their domestic telecom networks.

The U.S. has serious concerns about the security risks posed by Chinese technology companies, including Huawei and fellow Chinese telecommunications firm ZTE.

Intelligence agencies are concerned that Huawei and other Chinese companies may be beholden to the Chinese government or the ruling Communist Party, raising the risk of espionage.

The U.S. government has initiated an extraordinary outreach campaign to foreign allies, trying to persuade wireless and Internet providers in these countries to avoid telecommunications equipment from Huawei.

Federal prosecutors in the U.S. are also reportedly pursuing a criminal investigation of Huawei for allegedly stealing trade secrets from U.S. partners.

Sabrina Meng Wanzhou, the Chief Financial Officer of Huawei Technologies Co., was arrested in Canada in December 2018 on charges of violating U.S. trade sanctions against Iran.

Meng Wanzhou, who is the daughter of the Chinese telecommunication giant's founder, faces extradition to the U.S. to face fraud charges, which she denies.

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