Openreach

BT Says Huawei 5G Cap Will Cost It £500M

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BT says the cap placed by the British government on Huawei’s role in the rollout of 5G in the UK will result in unplanned changes to its infrastructure that will cost £500 million over a five-year period.

Earlier this week, the UK government announced limits on the role that Huawei – deemed a “high risk vendor” – can play in the 5G radio access network (RAN) and FTTP rollouts of the UK’s operators.

Basically, Huawei will not be allowed to provide equipment at more than 35% of basestation sites nationally across a particular network, or to carry more than 35% of total network traffic volumes.

When it comes to FTTP and other gigabit-capable networks, the Chinese vendor’s technology can be used to provide service coverage to no more than 35% of the UK premises covered. These caps must be adhered to within three years of the relevant government legislation coming into force, which is expected soon.

The FTTP cap can be planned for and managed as FTTP rollouts are still at an early stage: BT’s semi-autonomous fixed access network unit, Openreach, currently sources its FTTP gear from Huawei and Nokia and is in the process of deciding on a third vendor for its fiber access rollouts, which currently pass 2.2 million UK premises, less than 10% of the UK’s total.

However, the cap on the use of Huawei technology in the 5G radio access network is a significant issue for BT, as its 5G rollout is predicated on its 4G RAN infrastructure inherited from EE.

Now, though, because it has so much Huawei 4G gear in its network (deployed in urban areas, where its initial 5G rollouts have been focused), it will have to rip out and replace some of that Chinese technology and replace it with RAN gear from another vendor so that the introduction of 5G will meet the new UK government guidelines.

BT’s estimate is that it will cost it £500 million during the next five years, with much of that cost expected to come in the next three years. In its fiscal third-quarter trading statement today, the UK operator noted:

The new guidance will have some impact on our 5G rollout plans and the equipment used in our FTTP network build going forwards. We are in the process of reviewing the guidance in detail to determine the full impact on our plans. At this time we estimate an impact of around £500 million over the next 5 years.

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