Spanish telco Telefónica has renewed a key 5G contract with Chinese vendor Huawei.

As reported by the Spanish newspaper El País, the telco has renewed the contract that sees Huawei provide its 5G core network for residential users until 2030.

It comes just weeks after reports suggested that Telefónica was getting ready to ditch Chinese vendor Huawei from its 5G networks in Spain and Germany.

The European Union has pressured markets to limit the vendor’s involvement in the build-out of 5G. In 2020, the European Commission (EC) urged EU states to restrict “high-risk vendors” such as Huawei as they rolled out their national 5G networks.

However, El País reports that an agreement to renew the contract was signed in December, under the previous chairman José María Álvarez-Pallete.

The 5G contract covers millions of residential customer lines in the country.

It’s worth noting that the contract doesn’t cover the management of the 5G core for corporate and public administration customers, which includes national security, with these awarded to the Finnish company Nokia.

El País reports that Huawei’s terms were a key factor in Telefónica renewing the contract, as rival vendors were more expensive. The publication also adds that rival carrier Vodafone is in advanced talks with Huawei over the management of its Network Operation Center (NOC).

Álvarez-Pallete previously awarded Huawei the core contract for its entire Spanish 5G network to Huawei in 2019, around the same time US President Donald Trump placed the vendor on its US Entity List.

It was during Trump’s first term as president that he signed an executive order in May 2019 which gave the federal government the power to block US companies from purchasing any foreign-made telecommunications equipment deemed a national security risk.

The UK, Denmark, Sweden, Estonia, Latvia, and Lithuania have banned Huawei from playing a part in their 5G network infrastructure. Though no longer part of the EU, the UK initially granted the vendor a limited role in its 5G build before banning the company six months later in July 2020.

Despite the pressure to phase out Huawei, the Spanish government recently awarded the vendor a €12 million ($13.71m) wiretap contract.