UK comms industry counts the cost of Huawei tech ban

After UK government takes decision to remove so-called high-risk tech supplier’s 5G products from national communications infrastructure, operators add up the cost to mobile networks

As it made the decision to remove Huawei technology from the country’s growing 5G communications infrastructure, the UK government said that it was not taking such a decision lightly and that there would be a price to pay - and the billions that this price will be has now been confirmed by mobile operators.

In a House of Commons statement on 14 July 2020, UK culture secretary Oliver Dowden confirmed the UK government’s long-expected decision to commit to a timetable for the removal of Huawei equipment from the 5G network by 2027, adding that legislation will be passed to make it illegal for UK telcos to purchase Huawei 5G network equipment from the end of this year.

Dowden noted that the decision had been taken following the US government’s move on 15 May to extend restrictions on the sale of hardware and software to so-called “high-risk” vendors such as Huawei, leading to the Chinese comms tech giant not being able to purchase equipment from long-standing suppliers. This meant, said Dowden, that the UK could no longer be confident it would be able to guarantee the security of future Huawei equipment that would see use in 5G networks. Huawei 5G technology is currently in use by operators Three UK, BT/EE and Vodafone.

Yet there was also an admission the decision would have consequences for every part of the UK in that it would delay the current national 5G roll-out programme. Dowden calculated that the January 2020 decision to restrict Huawei technology to just the radio access network of the 5G infrastructure had already set back roll-out by a year and cost up to £1bn. The new decision is projected to delay UK 5G roll-out by a further year and add hundreds of millions of pounds to costs.

The UK government said that in addition to the cost of requiring operators to remove Huawei equipment from their 5G networks by 2027, replacing the Huawei kit would add hundreds of millions of pounds to the cost of 5G deployment and further delay roll-out. All of this, said Dowden, would mean a cumulative delay to UK 5G roll-out of two to three years and costs of up to £2bn.

Only days earlier, speaking to the House of Commons Science and Technology Committee, Andrea Dona, head of networks at Vodafone UK, and Howard Watson, chief technology and information officer at BT Group, had each warned that to rip out long-established Huawei technology from their networks, from not only from nascent 5G infrastructures but also long-established 4G and 3G nets, would cost both firms sums of money in the small billions.

They added that they would need at least five years to undertake the work to avoid potential service blackouts and to avoid damaging both firms’ commitments to further developing a 5G infrastructure across the UK. Vodafone calculated in February 2020 that removing Huawei from its networks would cost in the region of €200m over two years, while BT’s estimate in January 2020 was half a billion pounds over five years.

Now the decision has been taken, BT said it currently estimates that full compliance with the revised proposals would require additional activity, both in removing and replacing Huawei equipment from its existing mobile network, and in excluding Huawei from the 5G network that BT continues to build. Yet now, with clarity on the timing, it was confident that to comply with the previous proposal by the National Cyber Security Centre (NCSC), the extra costs could be absorbed within its earlier prediction.

The operator said it would continue to work with relevant authorities as they consult on the future procurement strategy for fixed networks. “The security of our networks is an absolute priority for BT. Clearly this decision has logistical and cost implications for communications providers in the UK market – however, we believe the timescales outlined will allow us to make these changes without impacting on the coverage or resilience of our existing networks,” said BT chief executive Philip Jansen.

“It will also allow us to continue to roll out our 5G and full-fibre networks without a significant impact on the timescales we’ve previously announced,” he added. “Whilst we have provided our initial view on the estimated impact today, we will continue to evaluate the details of this decision thoroughly.”

A Vodafone spokesperson said: “We acknowledge the government’s understanding of the complexity of this issue and the desire to minimise disruption to consumers, businesses and public services through an adequate timeframe for implementation. Obviously, we are disappointed because this decision – as the government has highlighted today – will add delay to the roll-out of 5G in the UK and will result in additional costs for the industry. We will work with the government to address the implications of this decision, including the cost and the need to increase vendor diversity through OpenRAN.” 

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