U.S. in talks with Brazil for funding framework to purchase Nokia, Ericsson 5G telecom equipment

In an interview to Brazilian newspaper Folha de S.Paulo, the U.S. ambassador to Brazil, Todd Chapman stated, Washington is in talks with Brasilia on a funding framework for the acquisition of 5G telecommunications gear produced by Nokia and Ericsson.

This type of funding is a matter of “national security” to Washington and aims to “protect data and intellectual property, as well as sensitive information of nations”, said Chapman.

The development comes as a blow to Huawei, which has consolidated its position in Brazil over the last 2 decades.

Huawei did not immediately respond to Reuters’ request for comment.

So far, the Chinese company has successfully conducted 5G tests with all four Brazilian ISPs, including Telefonica Brasil SA, America Movil’s Claro, TIM Participacoes SA, and Oi SA.

In August 2019, according to media reports, Huawei was to invest in $800 million for a factory in Sao Paulo by 2022, in an effort to increase its Latin American footprint.

The U.S government has urged governments across the globe, including Brazil, over the potential risks of espionage, military as well as industrial, if data is routed though Huawei’s 5G telecom equipment.

“Who wants to make investments in countries where their information will not be protected?,” said Chapman to Folha.

The U.S. Ambassador highlighted the fact that funding, currently under discussion, would come from the International Development Finance Corporation – an international bank created by the Trump Administration to counter the operations of China’s Development Bank.

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