BT estimates the cost of the UK government’s decision to restrict the use of Huawei’s telecoms equipment will be around £500 million.
The UK government announced its position on whether to allow the Chinese vendor Huawei to participate in national telecoms networks on Tuesday. Despite security concerns raised by the United States and others, the UK chose to permit Huawei to play a limited role.
Philip Jansen, CEO of BT, said: “We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around £500 million over the next five years.”
Under the new rules, Huawei’s equipment may be used in no more than 35 percent of the radio access network, which connects devices to mobile phone masts. Huawei will be excluded from core network elements and from critical or sensitive sites such as nuclear facilities and military bases.
In a statement after the government announcement, BT said: “This decision is an important clarification for the industry. The security of our networks is an absolute priority for BT, and we already have a long-standing principle not to use Huawei in our core networks. While we have prepared for a range of scenarios, we need to further analyse the details and implications of this decision before taking a view of potential costs and impacts.”
The UK government said its decision followed a technical and security analysis from the National Cyber Security Centre, which it described as the most detailed assessment in the world of what is needed to protect the country’s digital infrastructure.
US officials had urged the UK to ban Huawei equipment on national security grounds. Earlier this month, US authorities provided British counterparts with a dossier outlining perceived risks.
The UK has maintained that any decision on Huawei would be evidence-led and based on its own assessments. Nevertheless, the decision is likely to disappoint its closest ally. As the UK completes its departure from the EU, the move also signals a willingness to make independent policy choices rather than follow US or European pressure.
Victor Zhang, Vice President of Huawei, said:
“Huawei is reassured by the UK government’s confirmation that we can continue working with our customers to keep the 5G roll-out on track. This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market.
We have supplied cutting-edge technology to telecoms operators in the UK for more than 15 years. We will build on this strong track record, supporting our customers as they invest in their 5G networks, boosting economic growth and helping the UK continue to compete globally.
We agree a diverse vendor market and fair competition are essential for network reliability and innovation, as well as ensuring consumers have access to the best possible technology.”
All four of the UK’s major mobile operators currently use Huawei equipment in their networks. Providers such as BT now face the practical challenge of meeting the government’s new requirements.
Although the estimated cost is substantially lower than scenarios that would require complete removal of Huawei equipment, BT’s £500 million figure shows the decision will still carry a significant price tag.
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