Huawei 5G ban likely ‘manageable’ for telecoms: analyst

A ban on technology from Huawei Technologies Co. Ltd. in Canada’s networks would likely only affect future build outs for 5G, and as such wouldn’t be the billion-dollar financial hit some are predicting, according to Desjardins analyst Maher Yaghi. Yaghi said in a research note Friday afternoon that there are various types of bans the government could be considering, ranging "from issuing no specific recommendation to requiring operators to eliminate all installed Huawei equipment from existing networks. We believe the Canadian government is likely to adopt restrictions in connection with the upcoming 5G deployment that are aligned with those elsewhere.” Earlier in the day Public Safety Minister Ralph Goodale dismissed reports the government will soon announce a ban, following an an article in Australia’s Sydney Morning Herald which said that a formal ban on both Huawei and ZTE Corp. “from Ottawa is expected within weeks.” “That’s speculation,” Goodale told reporters following a speech in Toronto Friday. Calls to ban Huawei equipment from Canadian telecoms’ networks were renewed after the arrest of CFO Meng Wanzhou in Vancouver earlier this month. The government is currently conducting a national security review into 5G technology, though the deadline for when that review is scheduled to be completed hasn’t been made public. A Globe and Mail article quoting anonymous sources reported earlier this week that should the government go ahead with the ban, the cost to telecoms such as BCE Inc. and Telus Corp. to remove Huawei equipment could be in the hundreds of millions each, or even up to $1 billion for Telus. Yaghi said Friday that the estimates quoted by the Globe “relate to a situation that is unlikely to materialize, in our view.” Both Bell and Telus have been working with Huawei on 5G and fixed-wireless projects. Back in September, Bell CEO George Cope said Huawei was "one of the many suppliers we like to deal with." The Shenzhen-based company has worked to entrench itself in the country in other ways, through academic and business partnerships. For example, last year it joined not-for-profit incubator and Kanata-based Centre of Excellence in Next Generation Networks (CENGN). CENGN said in a statement this week to The Wire Report that the company, which helps commercialize and scale Canadian small- and medium-sized businesses by offering a test bed for tech, "will continue to monitor the situation with Huawei." While in Yaghi's mind the more-likely scenario that the ban only extend to future 5G network deployment “would not be ideal, we believe it would still be manageable for large Canadian telcos.” Yaghi said there would be a limited effect on telecoms’ financials since “the actual installation of 5G equipment has not started yet, except for the densification of networks, which is generally accomplished using LTE-A technology.” He added telcos usually use multiple equipment vendors to reduce risk. “We believe a potential change in vendors could be implemented over an extended timeframe so as to minimize the adverse impact,” he said. “Moreover, we believe that a potential government ban on Huawei equipment could come with financial compensation in the form of subsidies, which would further mitigate the potential downside from this situation.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Huawei 5G ban likely ‘manageable’ for telecoms: analyst

News | December 14, 2018

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Huawei 5G ban likely ‘manageable’ for telecoms: analyst

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