The operator will use Huawei equipment in the core of its 5G network in Spain and is set to confirm a second supplier next year.
The decision, reported in the Spanish newspaper Expansion, is good news for Huawei but it marks a strategic shift for Telefónica. Previously Huawei was the sole provider of core network technology in Telefónica’s 3G and 4G networks.
As the report noted, the second supplier could be established players Ericsson or Nokia, or one of the new players, such as Mavenir or Affirmed Networks as the operators strive to move away towards disaggregated systems.
It also puts pressure on the other contenders to be "commercially aggressive".
As the former incumbent, Telefónica is the most leading provider of services to the Spanish public sector and government, although Vodafone has won a number of contracts.
US President Donald Trump has repeatedly called on countries in Europe to exclude the Chinese equipment maker's tech from networks. Huawei has strongly denied US allegations that its equipment is used for espionage by the Chinese state, claiming the accusation is politically motivated.
Several telcos including Vodafone and Deutsche Telekom are also choosing a multi-vendor 5G strategy.
Dutch operator KPN signed agreement with Huawei earlier this year to upgrade its mobile radio and antenna network (RAN) but said it will select a “Western vendor” for the core 5G network.
Last week, Deutsche Telekom froze all 5G deals with vendors, awaiting a decision about the use of Huawei in its networks,
EU member states are due to agree on EU-level measures to mitigate 5G cybersecurity risks by 31 December 2019, following a report published in October.
By 1 October 2020, Member States must assess the recommendations to determine whether further action is needed.