(Reuters) -The European Union and U.S. have warned Malaysia over risks to national security and foreign investment as it finalises a review of its 5G rollout that could allow China's Huawei Technologies Co Ltd to bid for a role in its telecoms infrastructure, the Financial Times reported on Tuesday.
EU and U.S. envoys to Malaysia wrote to the government in April after it decided to review a decision to award Ericsson (BS:ERICAs) a 11 billion ringgit ($2.5 billion) tender to build a state-owned 5G network, the report said citing letters seen by FT.
Malaysia's 5G roll-out has seen repeated setbacks because of industry concerns over pricing and transparency, as well as worries that a single government-run network would result in a nationalised monopoly.
Huawei had long been seen as the frontrunner for the contract, with the government having previously dismissed security concerns raised by the United States.
"Senior officials in Washington agree with my view that upending the existing model would undermine the competitiveness of new industries, stall 5G growth in Malaysia, and harm Malaysia’s business-friendly image internationally," U.S. ambassador to Malaysia Brian McFeeters wrote in one of the letters.
"Allowing untrusted suppliers in any part of the network also subjects Malaysia’s infrastructure to national security risks."
Huawei, the U.S. embassy in Kuala Lumpur, the EU delegation to Malaysia and the Malaysian Ministry of Communications and Digital did not immediately respond to a Reuters request for comment.
($1 = 4.4570 ringgit)