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British Telecom Firm BT Expects $650m Hit Due To UK’s New Policy On Huawei

British Telecom Firm BT Expects $650m Hit Due To UK’s New Policy On Huawei
The decision of the United Kingdom to limit the role of the Chinese telecom giant Huawei to some non-core parts of its 5G network will hit it with an amount of £500 million (US$650 million) in the next five years, said the BT Group.
In order to determine the full impact on its plans, a complete review of the guidance of the government is being conducted by the telecommunications company, said Chief executive Philip Jansen on Thursday. One of the biggest vendors of telecoms network equipment for BT is Huawi and in the area of full optical fibre components in the UK, it has a 44 per cent market share.
Analysts led by Carl Murdock-Smith at Berenberg that the impact on BT because of the rules on telecoms equipment vendors was “worse than expected”.
Earlier this week, the UK government decided to keep the Shenzhen-based Huawei away from the core of the new 5G mobile networks and not use its equipment. The government also decided to limit the amount of Huawei equipment to be used in the  next-generation 5G technology and fibre-to-the-home segment to just 35 per cent. 
Three years have been given to carriers to install the required changes. Even though BT had already initiated efforts to replace equipments from Huawei from its core EE mobile network that it had acquired in 2016, the company says that it will now be required to inquire into what offers are being given by some of the other telecom vendors such as Nokia to replace rest of the Huawei equipment.
Jansen said on a call with reporters that the majority of the hit will go towards meeting the new guidelines that requires the company to replace some Huawei 4G equipment with those made by a different supplier so that the company is able to layer the new 5G equipment over the older antennas,
“Targets stay the same, costs go up, and there’s a lot of operational upheaval. But we can manage it,” Jansen said. With respect to the time frame for the conversion, Jansen said that three years is “one of the options we considered, and what we said today is we can do that, no problem”.
UK’s efforts to roll out fibre-optic broadband across the country need more clarity, BT has said. The company referred to the aspect of fair returns on further investments and lower property taxes.
“Boris’s objective of full fibre to the whole country by 2025 is possible. It’s just very, very hard. And we have no time to waste,” Jansen said on the call with reporters. “My sadness is I don’t think those things will get resolved quickly and therefore he may well miss” the target.”

Christopher J. Mitchell

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