BT, Vodafone Need 5 Years to Drop Huawei Without ‘Blackouts’

(Bloomberg) -- BT Group Plc and Vodafone Group Plc told U.K. lawmakers they would need at least five years to swap out China’s Huawei Technologies Co. if the government decides on strict rules that would ban the company’s products from being used in 5G networks.

It would cost Vodafone on the lower end of “single-figure billions” to swap out its thousands of Huawei stations and antennas across the country, according to Andrea Dona, Vodafone’s head of U.K. networks, speaking to the U.K. Parliament’s Science and Technology Committee on Thursday.

Dona added it would take a minimum of 5 years to swap Huawei out without disruption. Howard Watson, BT’s chief technology and information officer, agreed and said it would take “ideally seven” because of the practical limitations on closing streets and dispatching engineers to sites.

“It is logistically impossible, I believe, to get to zero in a three-year period,” said Watson, referring to the time-frame targeted by some Conservative party lawmakers. “That would literally mean blackouts for customers on 4G and 2G as well as 5G throughout the country.”

It could cost BT “tens to a hundred million” beyond the 500 million pounds ($632 million) the company already earmarked for complying with rules imposed by Prime Minister Boris Johnson in January, which limit Huawei’s presence to 35% of 5G and fiber networks outside sensitive core components, where they will be banned by 2023.

BT has trialled swapping Huawei antenna sites to Nokia and Ericsson, Watson said. He was pressed by members of Parliament on the company’s use of Huawei in its 4G core, and repeated BT’s position that it is set to be swapped to an Ericsson core before 2023.

About two-thirds of BT’s 4G network is Huawei and the rest Nokia, while about a third of Vodafone’s 4G network is Huawei and the rest Ericsson, the executives said. Huawei makes up most of BT’s 5G at the moment, BT’s Watson confirmed.

U.K. officials are currently weighing a report from the National Cyber Security Centre which has investigated the impact of U.S. sanctions introduced in May on Huawei’s use of U.S. technology in its silicon.

Industry consultant John Strand estimated the cost for all of Europe to replace Huawei at 3.5 billion euros, and said some carriers like TDC have managed to switch away from the Chinese company without incurring punitive costs.

“The way Vodafone and BT were explaining their challenges, it was a total exaggeration,” said Strand, who added they would already be due to replace a lot of their equipment.

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