Financial hit of a Huawei 5G ban likely ‘non-material’ to Bell, Telus: Desjardins

If the Canadian government eventually decides to ban Huawei Technologies Co. Ltd. from Canada’s 5G networks, the financial consequences suffered by Canada’s big telecom companies would likely be negligible, according to a Desjardins analyst. “While we expect issues with Huawei to remain topical in the coming months, we believe the actual financial impact is likely to be non-material,” Maher Yaghi wrote in a Tuesday note. “Given relationship with Huawei, we see it as being in a similar situation as BCE.” The commentary comes ahead of Telus Corp.’s quarterly earnings call Thursday, and on the heels of BCE Inc.’s top company brass reassuring investors last week that a Huawei ban wouldn’t delay Bell’s 5G rollout plans or create substantial costs for the company. BCE CEO George Cope said last Thursday that while the company uses Huawei equipment, it’s not part of its network core and Bell has yet to select its 5G vendor. He said whatever the conclusion of Ottawa’s cyber security review is, it would not “in any way impact our timing in the market for 5G.” Media speculation has swirled over what barring the Chinese-based telecom equipment giant from 5G networks would mean for Canadian carriers as the U.S. pressures Canada to ban it over national security concerns. Bell and Telus have been singled out in various media reports as the companies most likely to hurt from a Huawei 5G ban, including a notable Globe and Mail report from early December that suggested the price tag for Bell and Telus could exceed $1 billion, or even reach near that height for Telus alone. Yaghi had also previously deflated those numbers, suggesting a ban would only affect future investments in 5G. Both companies are doing early work with Huawei ahead of their own 5G deployments. Prime Minister Justin Trudeau met with Telus CEO Darren Entwistle Monday and the two were expected to discuss the issue. Trudeau told reporters ahead of the meeting he expected network security to come up along with other topics such as rural broadband development. “There are many different topics to talk about. I know the security and safety of our networks is obviously an issue that will come up -- I expect to discuss it,” he said. “But as you know, we are going to be taking advice from our security professionals and intelligence agencies on how to make sure that Canada and our data protections are kept safe.” Some have speculated that the chances of a ban have increased over the past months, although the timeline on a decision and the specific implications of a ban remain unclear. Ottawa has said, though, that it is not close to reaching a decision, and it will take more than just a matter of weeks to complete its security review.

Financial hit of a Huawei 5G ban likely ‘non-material’ to Bell, Telus: Desjardins

Brief | February 12, 2019

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Financial hit of a Huawei 5G ban likely ‘non-material’ to Bell, Telus: Desjardins

Brief | February 12, 2019

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