Telus silent on Scotiabank claim it hasn’t ruled out Huawei as 5G vendor

A day after announcing it would partner with Nokia Corp. and Ericsson AB on its 5G network build, Telus Corp. has not responded to questions about whether that announcement applies to the core or radio access portion of the network. The distinction is a key one because there is already an effective government ban on products from Huawei Technologies Co. Ltd. in network cores; the discussion over whether Huawei products should be allowed in 5G networks only refers to the radio access portion. That means if the announcement from Telus was indeed only about the core, the various media reports Tuesday that Telus was moving away from Huawei were inaccurate. Among major wireless providers, Telus is the one that uses Huawei equipment most extensively. If the government goes ahead with a ban on Huawei equipment in 5G networks, as it has been considering since 2018, Telus will have to replace its existing 4G Huawei equipment because it’s not interoperable with that from different vendors. That’s something Telus previously warned the government would be an expensive proposition, as part of its lobbying efforts against banning Huawei equipment from Canada’s 5G networks. Telus put out a press release Tuesday saying “it has selected Ericsson and Nokia to support building its 5G network.” It did not respond to questions from The Wire Report or other media asking for more details about what this means for its previously-announced plans to use Huawei equipment for the “initial module” of its 5G network build, or whether it means it will have to replace its existing Huawei equipment. Then on Tuesday evening, Scotiabank analyst Jeff Fan said in a research note that the announcement from Telus “pertained only to its 5G core (software/switches) and its decision on 5G RAN is still to be determined.” He said Telus “continues to wait for a potential favorable government decision and its initial 5G deployment includes Huawei modules.” Telus did not respond to questions Tuesday evening or Wednesday about whether the Scotiabank note is accurate, or about whether Tuesday’s announcement indeed applies to its RAN. Telus’ announcement followed one by its network sharing partner BCE Inc., which said in a press release Tuesday that it would be using Ericsson as one provider of 5G equipment; it previously chose Nokia as its “first” 5G vendor. But a Bell spokesperson said in an email that doesn’t mean Bell won’t use Huawei equipment for portions of its network, if the government allows it. Fan said in the Scotiabank note that Bell’s “move shows that it could no longer wait for the government's decision and that BCE wanted some vendor certainty, especially with Rogers (its largest competitor in the east) moving ahead.” He estimated that it would cost Bell about $200 million over three to five years to swap out the Huawei equipment if it decided against it as a 5G vendor, plus an additional annual cost due to using Ericsson/Nokia equipment of $20 million to $30 million. Bell didn’t respond to questions about whether that estimate was accurate, or whether they will have to remove Huawei equipment now, or if they can wait for a government decision while using Ericsson and Nokia on some parts of the network in the meantime. “Perhaps the reason TELUS can wait and BCE decided not to wait is due to BCE having a greater share of wireless subscribers in the east that overlaps” with Rogers Communications Inc., Fan said in the note. “Also for TELUS, because of its relatively higher dependence on Huawei for its 4G RAN, the cost to swap out would be higher, which means the benefit of waiting is greater.” He also said having different 5G vendors could have implications for the two telcos’ network-sharing agreement down the line. While having different vendors on one RAN isn’t unusual, “ultimately, we think they are better off to end up with the same RAN vendors for handoffs and interoperability across 4G and 5G.” But that could still happen, Fan said. If the government goes ahead with a Huawei ban, Telus “will swap to a combination of two of the three vendors: Ericsson, Samsung and Nokia. If there is no ban on Huawei, then BCE could add Huawei back and dial back on Ericsson or Nokia.” He added: “We admit the path to getting there in between is a bit more complicated.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Adam Langenberg at alangenberg@thewirereport.ca

Telus silent on Scotiabank claim it hasn’t ruled out Huawei as 5G vendor

News | June 3, 2020

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Telus silent on Scotiabank claim it hasn’t ruled out Huawei as 5G vendor

News | June 3, 2020

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Ericsson invests $634 million in R&D in Canada

Ericsson proud of research and development facilities in Canada

Rogers spends $8 million upping capacity at Toronto stadium; TTC work remains underway

SaskTel rolls out 5G service to more than 50 rural and remote areas

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us