09:11 AM EDT, 08/29/2025 (MT Newswires) -- (Updates with company response in the fourth paragraph.)

Telefonica's ( TEF ) 10 million euro ($11.7 million) fiber-optic service contract with the Spanish government was cancelled due to the use of equipment made by China's Huawei, Reuters reported Friday, citing the nation's digital transformation ministry.

"We confirm the cancellation of the contract for reasons of digital strategy and strategic autonomy," the report quoted the ministry as saying in an emailed statement.

The contract called for Telefonica ( TEF ) to provide fiber-optic connections to several government institutions, including the defence ministry, El Pais newspaper reported earlier on Friday.

Telefonica ( TEF ) declined to comment when contacted by MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)