Vodafone Warns Full UK Ban on Huawei Would Cost Billions of Pounds
July 09 2020 - 9:31AM
Dow Jones News
--Vodafone warned a removal of Huawei equipment from its U.K.
networks would cost billions of pounds
--BT Group said costs on top of the GBP500 million hit it has
already disclosed would depend on the timing
--Huawei expects no short-term impact from U.S. restrictions on
its supply capability to the U.K.
By Adria Calatayud
Vodafone Group PLC warned Thursday that a full removal of Huawei
Technologies Co.'s equipment from its U.K. networks would imply
additional costs of low single-digit billions of pounds.
Andrea Dona, head of networks at Vodafone U.K., said a change in
the guidance on telecom-equipment suppliers given by the U.K.
government would delay the rollout of its 5G networks and force it
to book extra costs, as investments would need to refocus on the
removal of equipment already deployed.
"If the current guidance were to be tightened and further
restrictions were to be imposed, we would need to spend in the
order of billions to change our current infrastructure," Mr. Dona
said in a session of the U.K. parliament's science-and-technology
committee.
For rival BT Group PLC, the costs of a full ban on Huawei would
depend on the timing of its implementation, its Chief Technology
and Information Officer Howard Watson told British lawmakers.
BT earlier this year said it expected to take a 500
million-pound ($630.5 million) hit over five years as a result of
the government's restriction on Huawei equipment. If a full removal
is implemented, BT's extra costs would be in the tens-to-a-hundred
million pounds on top of the GBP500 million already disclosed,
because 4G equipment would need to be replaced anyway, Mr. Watson
said.
Victor Zhang, head of Huawei's U.K. operations, told British
lawmakers in the same session that recent U.S. restrictions imposed
on the company will have no immediate impact on its supply
capability to the U.K.
The U.K. government earlier this year allowed China's Huawei to
build parts of its 5G network, but limited its market share to 35%
and banned it from the core parts of the network. However, recent
media reports indicate British officials are leaning toward
advising wireless carriers to reduce or altogether drop Huawei.
Replacing telecom equipment is challenging and costly and a full
removal of Huawei gear would require at least five years, Mr.
Watson said.
"It is logistically impossible to get to zero in a three-year
period. That would literally mean blackouts for customers on 4G, 2G
as well as 5G throughout the country," Mr. Watson said.
The U.K. telecom uses equipment made by Huawei and Finland's
Nokia Corp. in its radio-access networks, with the Chinese company
representing a majority of BT's current 5G network and two-thirds
of its 2G and 4G network, Mr. Watson said. BT's core networks use
Huawei, which is being removed, and Swedish vendor Ericsson AB.
"We have tended to use Huawei in the more urban areas of the
U.K. and that is where we tended to launch 5G initially, so the
majority of our current 5G deployment is on the Huawei network,"
Mr. Watson said.
Vodafone is currently using equipment made by Huawei and
Ericsson in the 5G radio-access networks it is deploying in the
U.K., Mr. Dona said, who didn't give details on the split between
the two suppliers, citing commercial sensitivity. Huawei isn't part
of the core of Vodafone's 5G network, where the aggregation of data
occurs, he added.
A third of Vodafone's 2G, 3G and 4G radio-access networks use
Huawei equipment, and the remaining two thirds use gear made by
Ericsson, Mr. Dona said.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
July 09, 2020 09:16 ET (13:16 GMT)
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