Canada is indicating it might not compensate major telecom providers if the federal government bans Huawei equipment from 5G networks, setting up a potential fight over a bill that could hit C$1bn. Canada, under pressure from the United States to ban Huawei gear on security grounds, is studying whether to allow the firm into the country’s next-generation 5G networks.
If Ottawa does announce a formal ban, the affected companies have made clear they want compensation for tearing out their existing Huawei gear, said two sources close to the matter. But the Liberal government, already pressing wireless providers to cut what it says are excessively high bills, seems less convinced.
“I’m not sure there is a solid legal case that we would have to compensate for making a proper national security decision,” said a government source who requested anonymity.
Federal politicians, said the source, also had to worry about “the public perception of handing over a billion dollars or more to very large companies.”
Ottawa has spent almost two years studying whether to allow Huawei into 5G networks and in June, with no sign of a decision coming any time soon, impatient Canadian providers took matters into their own hands. Bell Canada and Telus said they would partner with Ericsson and Nokia Oyj, even though they use Huawei in their 4G networks.
Technical experts say it is hard to marry one company’s 5G equipment with 4G gear from another provider. This effectively means the decision to go with Ericsson would eventually force Telus and Bell to remove the Chinese firm’s 4G equipment.
Bell and Telus do not have to act immediately, since a crucial auction of spectrum needed for 5G networks will not happen until June 2021.