The Spanish government has canceled a fiber-optic contract with Telefónica over its use of equipment made by Chinese vendor Huawei.

As reported by Spanish newspaper El País, the Ministry for Digital Transformation has reversed a decision to award Telefónica a €10 million ($11.72m) fiber-optic contract.

The contract would have provided fiber optic services for various public institutions, including the Ministry of Defense.

El País reported that Red.es, the public company under the department headed by Óscar López, had approved the €10m contract last week for Telefónica to install Huawei equipment in a public fiber optic mega-network of more than 16,000 kilometers (9,941 miles) that covers the entire Spanish territory.

However, last week the government opted to reverse the decision, with a spokesperson citing "reasons of digital strategy and strategic autonomy."

Unlike several other European countries, Spain hasn't designated a list of risk suppliers, meaning that the contract wouldn't have violated national regulations.

It comes a couple of weeks after Telefónica renewed a key 5G contract with Huawei, which will see Huawei provide its 5G core network for residential users until 2030.

Reports earlier in the summer suggested Telefónica was preparing to ditch Huawei from its 5G networks in Spain and Germany.

The European Union has pressured markets to limit the vendor's involvement in the build-out of 5G. In 2020, the European Commission (EC) urged EU states to restrict "high-risk vendors" such as Huawei as they rolled out their national 5G networks.

The UK, Denmark, Sweden, Estonia, Latvia, and Lithuania have banned Huawei from playing a part in their 5G network infrastructure. Though no longer part of the EU, the UK initially granted the vendor a limited role in its 5G build before banning the company six months later in July 2020.

Despite the pressure to phase out Huawei, the Spanish government recently awarded the vendor a €12 million ($13.71m) wiretap contract.