Vodafone and BT say removing Huawei will cost billions

FILE PHOTO: Branding hangs outside a Vodafone shop in Oxford, Britain, May 16, 2017. REUTERS/Toby Melville/File photo

LONDON (Reuters) – Britain’s rebound from COVID-19 could be harmed if the government demands a speedy removal of telecoms equipment made by China’s Huawei from mobile networks, Vodafone and BT warned on Thursday.

The world’s second-biggest operator, Vodafone, said it would cost “single figure billions” of pounds to remove the equipment.

BT has put the cost of complying with an existing requirement to lower Huawei usage at 500 million pounds ($633 million).

“I am concerned that an ultra aggressive imposition of a change in policy could hamper our economic recover in the UK,” Vodafone UK’s head of technology Andrea Dona told British lawmakers.

Vodafone and BT need a minimum of five years and ideally seven to avoid major disruption to Britain’s emerging superfast networks, their technology bosses told the lawmakers.

Britain in January capped Huawei’s role in its 5G networks at 35% and barred it from the most sensitive parts of the system.

The United States alleges that the Chinese government could use Huawei’s equipment for espionage, which Huawei denies.

The British government has said new U.S. sanctions on chip technology could damage Huawei’s ability to supply crucial networking equipment.

As a result it is revisiting its policy on Huawei, with ministers indicating that a total ban is likely.

BT is already trialing switching some network sites from Huawei to other vendors, its chief technology officer Howard Watson said.

Huawei’s UK chiefs told the lawmakers it was too soon to quantify the long-term impact of the sanctions and no hasty decision should be made.

Britain wants to encourage new entrants into the market, reducing reliance on Huawei, which only has Ericsson and Nokia as major rivals in Europe.

Samsung, which provides some gear to Hutchison’s Three UK, said it could “definitely” supply a new 5G network, and was in active commercial talks with European operators.

“The one thing that is a challenge for Samsung entering the UK or European market is more related to a request for single RAN technology,” Samsung Executive Vice-president Woojune Kim said, referring to the Radio Access Network which links the core network and devices.

He also said there had been “brutal” competition and some of the contract prices “did not make sense”.

($1 = 0.7904 pounds)

(Reporting by Paul Sandle; editing by Kate Holton and Jason Neely)

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