U.K. telecom group BT said that the decision by the UK government to restrict the use of Huawei’s kit in the country’s 5G networks would have a cost of £500 million ($655 million) for the company over the next five years.
“We are in the process of reviewing the guidance in detail to determine the full impact on our plan,” BT CEO Philip Jansen said in a release.
“The security of our network is paramount for BT. We therefore welcome and are supportive of the clarity provided by Government around the use of certain vendors in networks across the U.K. and agree that the priority should be the security of the U.K.’s communications infrastructure,” Jansen added.
The CEO also warned that the operator will have to remove some Huawei equipment from its 4G networks.
“Inevitably, because of the way that the network works on 4G and 5G, there will be some 4G boxes that are Huawei that will have to be eradicated,” he said.
BT uses Huawei equipment within [its mobile unit] EE’s mobile infrastructure and, to a lesser extent, in BT’s fiber network. Rival operators O2, Three and Vodafone also use Huawei’s equipment in some parts of their networks.
Earlier this week, the U.K. government decided to allow Huawei to continue providing equipment to local 5G networks but with certain restrictions. Under the new rules, the Chinese vendor will be banned from supplying equipment for core parts of 5G networks and will also be limited to a minority presence of no more than 35% in the 5G Radio Access Network.
The government also said that high-risk vendors will be excluded from sensitive geographic locations, such as nuclear sites and military bases.
This decision represents a defeat for the U.S. government, who had been pressing its key allies around the world to ban Huawei due to security concerns. Washington believes that the Chinese government uses Huawei’s equipment for spying purposes.
U.S. Secretary of State Mike Pompeo urged Britain to reconsider its decision to allow China’s Huawei to take part in 5G networks.
“There is also a chance for the United Kingdom to relook at this as implementation moves forward,” Pompeo told reporters.
“We will make sure that when American information passes across a network we are confident that that network is a trusted one,” he went on. “Our view of Huawei is: putting it in your system creates real risk.”
“When you allow the information of your citizens or the national security information of your citizens to transit a network that the Chinese Communist Party has a legal mandate to obtain it creates risk,” Pompeo added.
“I am very confident that our two nations will find a way to work together to resolve this difference,” Pompeo said, adding that the Five-Eyes intelligence alliance would remain.
Some countries including Australia, New Zealand and Japan have already restricted the use of Huawei’s gear in the deployment of 5G networks.
