BCE Says Potential Huawei Ban Won't Delay Launch of 5G Network

(Bloomberg) -- BCE Inc. said a potential Canadian ban on telecommunications equipment from Huawei Technologies Co. won’t affect its plans for capital expenditures or the timing of the rollout of 5G networks.

"We clearly recognize the issues at play, and we’ll manage those appropriately going forward and of course, follow the law," Chief Executive Officer George Cope told investors during the company’s fourth-quarter earnings call Thursday. "We’ve made no selection yet of our 5G vendor."

The comments Thursday are the most wide-ranging from BCE since a feud erupted between China and Canada, with Huawei at the center. Canadian Prime Minister Justin Trudeau is currently weighing a ban on using Huawei gear in 5G networks and his government’s security review is ongoing, with no timeline set for a decision. Several key ex-officials say they expect a ban.

"If there was a ban or we chose a different supplier than Huawei for 5G, we’re quite comfortable all those developments would be addressed within our traditional capital intensity envelope and therefore, no impact from a capital expenditure program outlook," Cope said. "Nor do we think whatever the outcome is would it in any way impact our timing in the market for 5G.”

BCE’s Bell Canada and rival Telus Corp. are the Canadian telecommunication companies most exposed if Trudeau decides to freeze out Huawei from the next-generation network. The country’s third major telecom company, Rogers Communications Inc., isn’t using it in 5G.

"Any 5G ban would likely be most problematic for just Bell and Telus, but with spending requirements that would not likely stick to valuations," Canadian Imperial Bank of Commerce telecom analysts said in a blog post this week.

Canada arrested Huawei Chief Financial Officer Meng Wanzhou in Vancouver on Dec. 1, after a U.S. request. Meng now faces extradition to the U.S., and China has since seized two Canadians and sentenced a third to death. China’s envoy to Canada has warned of "repercussions" if Huawei is banned from Canada’s 5G network. Some of Canada’s closest intelligence allies, including the U.S., Australia and New Zealand, have already restricted or banned Huawei.

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