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No Compensation Likely For Canadian Telecom Providers If A Ban On Huawei Is Imposed: Reuters


09/15/2020


No Compensation Likely For Canadian Telecom Providers If A Ban On Huawei Is Imposed: Reuters
If the Canadian federal government bans use of equipment manufactured by China’s Huawei from the country’s 5G networks major telecommunications providers might not be compensated by government agencies, according to a report published by the news agency Reuters. In such a situation the total loss amount to telecommunications providers could be C$1 billion ($758 million).
 
The United States has been putting pressure on Canada to ban the use of equipment from Huawei Technologies Co Ltd because of security reasons and the Canadian government is currently assessing whether the Chinese company should be allowed to participate in the building of the next-generation 5G networks in the country.
 
According to the report, the companies that would get affected by a ban on Huawei by the Canadian government have demanded compensation for replacing their existing Huawei equipment from their telecom networks.
 
But the demand by the companies is likely to be rejected by the Liberal government which has already asked the companies providing wireless services to cut down on what it claims are excessively high bills.
 
“I’m not sure there is a solid legal case that we would have to compensate for making a proper national security decision,” a government source, who requested anonymity given the sensitivity of the situation, reportedly told Reuters. According to the report, quoting the source, Canadian federal politicians also had to worry about “the public perception of handing over a billion dollars or more to very large companies.”
 
It has been almost two years that the Canadian government has been assessing the issue of allowing Huawei into the country’s 5G networks. Impatient Canadian wireless providers took matters into their own hands in June as the government had not indicated anything about its decision on Huawei.
 
Ericsson and Nokia Oyj were selected as potential partners by Bell Canada and Telus Corp respectively. Both the companies have Huawei equipment in their 4G networks.
 
According to technical experts, it is very difficult to use 5G equipment of one company with the exiting 4G equipment of another company. Therefore Telus and Bell will essentially have to replace almost all of the 4G equipment of the Chinese company if they have to work for their 5G networks with equipment from Ericsson or Nokia Oyj.
 
But since a crucial auction for spectrum for 5G networks will not be organized by the Canadian government until June 2021, therefore there is no need for Bell and Telus to hurry.
 
The cost of its 5G network deployment could be increased and its services could become more expensive for consumers if there is a ban without compensation, Telus had said in a February 2019 filing.
 
(Source:www.reuters.com)


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