Telecoms carrier BT sees US$650 million hit from Britain’s new limits on Huawei

BT Group is expecting a £500 million (US$650 million) hit over the next five years from the Britain’s decision to restrict Huawei Technologies in the nation’s mobile broadband infrastructure.

Chief executive Philip Jansen said on Thursday the telecommunications company is reviewing the government’s guidance to determine the full impact on its plans. Huawei is one of BT’s biggest suppliers of telecoms network equipment, and in Britain, has a 44 per cent market share in full optical fibre components.

BT shares fell 6.3 per cent at 9:37am in London after the company reported third-quarter profit that missed analyst estimates. The impact on BT of the new rules on telecoms equipment suppliers was “worse than expected”, said analysts led by Carl Murdock-Smith at Berenberg.

Britain decided on Tuesday to ban the Shenzhen-based company’s gear from the core of new wireless networks and cap its market share in next-generation 5G technology and fibre-to-the-home at 35 per cent.

Carriers have three years to make the needed changes. Though BT had already begun efforts to remove Huawei from the core of the EE mobile network it acquired in 2016, it will now need to lean more on other suppliers such as Nokia for the rest.

The bulk of the cost to meet the new guidelines will come from the need to switch some Huawei 4G kit to gear made by a different supplier, in order for new 5G equipment to be layered on top of the older antennas, Jansen said on a call with reporters.