Spanish government cancels contract with Telefonica for using Huawei gear

(Corrects to clarify that the ministry did not cite wider European concerns in first paragraph)

MADRID (Reuters) -The Spanish government has cancelled a fibre-optic service contract with Telefonica over the use of equipment made by China's Huawei, the Digital Transformation Ministry said, amid concerns in Europe that such gear may pose a security risk.

"We confirm the cancellation of the contract for reasons of digital strategy and strategic autonomy," the ministry said in an emailed statement, without elaborating.

The report by El Pais newspaper earlier on Friday also said that through this 10 million-euro ($11.7 million) contract, Telefonica was to supply fibre-optic connections to a series of government institutions including the Defence Ministry.

A Telefonica spokesperson declined to comment.

Telefonica's Chief Operating Officer Emilio Gayo told Reuters last month that the company was "reducing its exposure to Huawei" in Spain to comply with EU recommendations to telecom operators to phase out Huawei-made devices over security concerns.

While some European countries, including Germany, have passed outright bans on the use of Huawei gear, Spain has not, and the company is reportedly keeping some equipment from the Chinese producer for the retail 5G mobile network.

($1 = 0.8542 euros)

(Reporting by Inti Landauro, Editing by Louise Heavens)

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