Hungarian minister opens door to Huawei for 5G network rollout

A Huawei logo and a 5G sign are pictured at Mobile World Congress (MWC) in Shanghai

BUDAPEST (Reuters) - Hungary's foreign minister opened the way on Tuesday for Chinese telecoms giant Huawei [HWT.UL] to be involved in the rollout of the country's high-speed 5G network.

The United States has piled pressure on its allies, including Hungary, to shut out Huawei Technologies, the leading telecoms equipment vendor with a global market share of 28%, saying its gear contained "back doors" that would enable China to spy on other countries. Huawei has denied the accusations.

Hungary has said however it had no evidence that Huawei equipment would pose a security threat and Foreign Minister Peter Szijjarto announced at an event in China on Tuesday that Hungary would involve Huawei in the 5G rollout.

Szijjarto said Huawei would cooperate with Vodafone and Deutsche Telekom in the Hungarian build-up according to an emailed Foreign Ministry statement.

Deutsche Telekom's Hungarian unit said Huawei was just one of the suppliers tested for the 5G technology.

Hungarian Prime Minister Viktor Orban's government has forged closer ties with China in government finance, banking and infrastructure, including a flagship high-speed railway project under Beijing's Belt and Road infrastructure initiative.

Hungary published the draft documentation for the sale of more than 400 megahertz of 5G spectrum in June, aiming for a commercial start of the service at main industrial facilities next year.

Magyar Telekom said Hungarian telecoms regulator NMHH had registered it as a participant in the 5G tender. It added however that the regulator had scrapped the previously announced bidding dates and had not yet published new dates.

"Magyar Telekom is currently testing 5G technology with several suppliers, including Huawei's Hungarian unit," the company's press office said in an emailed response to questions.

"However, it has not entered into an agreement with Huawei to build up its entire Hungarian 5G network."

Vodafone's Hungarian unit, which launched a commercial 5G service in central Budapest last month on a spectrum acquired in 2016, declined to comment on the current tender, but confirmed that regulator had suspended the process.

Hungary had planned to wrap up the 5G tenders by October. The regulator could not comment immediately on the reasons for the delay.

During a visit to Budapest in February, U.S. Secretary of State Mike Pompeo cautioned allies against deploying equipment from the Chinese company, saying it would make it more difficult for Washington to "partner alongside them".

Hungary's Szijjarto then brushed off U.S. concerns over Russia and China, saying Budapest was fulfilling its obligations to Western allies as a member of the NATO military alliance.

The European Union, of which Hungary is a member, has warned of the risk of increased cyber attacks by state-backed entities but refrained from singling out China and Huawei as threats.

Hungarian Innovation and Technology Minister Laszlo Palkovics told Reuters in June that Budapest was studying the example of Germany, its biggest foreign investor, where he said an assessment system was developed to precisely identify possible security threats.

German regulation had initially not excluded Huawei from the build-out of 5G mobile networks. However, Foreign Minister Heiko Maas on Monday cast doubt on whether the company could participate in the development and construction of the country's fifth-generation data network.

(Reporting by Gergely Szakacs and Krisztina Than; Editing by Alison Williams)