Government decision on Huawei to cost BT £500m

Government decision on Huawei to cost BT £500m

31 January 2020 | Natalie Bannerman


BT has warned that It will cost £500 million to remove Huawei equipment from parts of its network under the government’s decision to limit the vendor’s role in the UK’s 5G plans.

The figure, based on a period of five years, includes EE’s 5G Mobile network as well as its full fibre broadband networks. Currently BT uses more Huawei uses in its masts and towers than allowed under these new rules and will force the operator to strip its equipment out and replace it with gear another vendor.

Under the new rules, Huawei is only permitted to be used in limited parts of any UK 5G network and only to a limited percentage because it is considered a ‘high risk vendor’. Specifically, the company is banned from all safety related and safety critical networks in critical national infrastructure and security critical network functions. In addition, this limited role is capped at 35%.

Speaking on the decision, BT CEO Philip Jansen (pictured) said, “The security of our network is paramount for BT. We therefore welcome and are supportive of the clarity provided by government around the use of certain vendors in networks across the UK and agree that the priority should be the security of the UK’s communications infrastructure. 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 £500m over the next five years.”

Jansen went on to explain that in order to replace any Huawei 5G equipment, it would also have to remove parts of the 4G network as 4G and 5G boxes need to come from the same supplier.

“The way 4G and 5G work is at the moment when you put a 5G box in a mast it has to go on top of a 4G box and it has to be the same manufacturer,” explained Jansen. “We are going to have to take out some 4G Huawei boxes and there’s a cost to that. That’s probably the single biggest cost. In order to get 5G to work we have to replace the 4G boxes.”  

At the time of the announcement, BT share prices fell by 7% amid a 2% drop in revenue to £17.25 billion for Q3 of 2019, as profits fell 3% to £1.91 billion.