Trump’s Huawei ban will hit rural US carriers the hardest as replacing equipment will cost ‘millions’

It took Jim Kail’s telecommunications company LHTC Broadband nearly five years to equip almost 1,000 customers in the rural township of South Canaan, Pennsylvania, with high-speed fibre broadband. But now, Kail could be at risk of having to undo all that work, simply because LHTC had chosen to install hardware made by Chinese telecoms equipment supplier Huawei Technologies.

Huawei’s equipment, the US government says, is a potential security threat that could be used for Chinese intelligence. Government agencies are already banned from using its gear, and the Federal Communications Commission (FCC) is deliberating over whether to ban carriers from using subsidies received to procure Chinese telecoms equipment.

“If we had to replace that equipment for over 950 customers, it would take us one to two years of doing nothing but that, and we’d have to put ongoing projects on hold,” said Kail, the chief executive of LHTC Broadband. “I don’t even want to think about it.”

Companies like LHTC may be required to replace the Huawei equipment if the proposed ban goes through since it would be difficult to service and upgrade gear from prohibited Chinese suppliers.

Although Huawei accounts for less than 1 per cent of the US telecommunications equipment market, according to research estimates by Dell’Oro Group, companies like LHTC. which have limited budgets and receive subsidies from the FCC, tend to rely on Chinese equipment because it is often the most cost-effective.