The European Union (EU) and the US reportedly warned Malaysia about the risks of allowing Huawei a role in building its 5G infrastructure, after the country potentially opened the door following a decision to review a previous contract awarded to rival Ericsson.

Financial Times reported the US and Europe sent letters to Malaysia after it detailed a review of a contract awarded to Swedish vendor Ericsson in July 2021 worth MYR11 billion ($2.5 billion) to build and manage its national network.

Full details of the 5G review initiated by Prime Minister Anwar Ibrahim in December 2022 have not been made public, however Malaysia last month approved construction of a second wholesale network to be introduced in January 2024.

The review was prompted by concerns about the transparency of the process of the award to Ericsson, while operators had called for the creation of a second network to speed deployment and increase security.

With its future 5G plans up in the air, the US and EU apparently warned Malaysia of the national security risks and hit to international investment it could face should it allow Huawei a role.

Brian McFeeters, the US ambassador to Malaysia, reportedly wrote senior officials within his government agreed “upending the current model” would undermine competitiveness in new industries, stall 5G growth and harm the nation’s business-friendly image internationally.

Michalis Rokas, ambassador and head of the EU delegation to Malaysia, noted the bloc had invested more than €25 billion in the nation and any policy changes would affect the country’s attractiveness for investors.

FT added Huawei could lobby for a role in the second 5G network, but it is unclear how such a decision would impact the terms of Malaysia’s deal with Ericsson.