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May 22, 2019
UK telecom giant BT is preparing for a possible future without Huawei, one of its biggest network suppliers, after US President Donald Trump slapped trade restrictions on the controversial Chinese company late last week.
The executive order and inclusion of Huawei's name on a Commerce Department blacklist would prevent US companies from buying from or selling to the Chinese vendor without the US government's permission, denying Huawei access to vital components used in its consumer devices and network gear.
Huawei has stockpiled inventory and insists it can manage without US suppliers as it ramps up investments at HiSilicon, its own chip-making subsidiary.
Figure 1: No Huawei Smartphone! A Huawei CPE featured at EE's 5G press conference near St Paul's Cathedral, but the Chinese vendor's smartphones were conspicuous by their absence.
But the latest developments regarding Huawei, which opponents see as a conduit for Chinese spying, have unnerved telecom operators that rely heavily on the Chinese vendor's products. Last year, similar trade sanctions against ZTE forced the smaller Chinese manufacturer to cease operations and nearly drove it out of business.
EE, the UK mobile operator BT bought from Deutsche Telekom and Orange in 2016, currently uses Huawei products in its core network systems and for equipment at radio sites up and down the country, but the entire relationship is now under review.
In late 2018, BT confirmed it would be replacing Huawei in the mobile core to bring EE into line with a long-standing BT policy that excludes Chinese vendors from this part of the network, often seen as the "brain" of the system.
Because BT has yet to identify a replacement, Huawei will continue to feature in EE's mobile core when the operator launches its 5G service next week. Like many other telcos, BT will initially deploy a version of 5G technology called "non-standalone," which links new 5G radio technologies to the existing 4G core.
But as it migrates to the full "standalone" version of 5G, BT will eventually shift to a new 5G core built by one of Huawei's rivals.
Speaking to Light Reading at EE's 5G press conference earlier today, Howard Watson, BT's chief technology and information officer, revealed that BT is now in core network trials with Cisco, Ericsson and Nokia but has yet to make a final decision about which provider it will use.
"It will pilot during 2019 and we will start to do deployment probably in the middle of 2020," he said. "That new core will be 4G, 5G non-standalone and 5G standalone -- it will have the capability to do all three -- and we will have to migrate our 4G customers onto that. We'll take most of 2021 doing that."
The deployment timescale reflects the challenges involved in introducing a new core network but means Huawei will continue to be active in BT's mobile core until 2022.
That could alarm the UK government, whose Department for Culture, Media and Sport (DCMS) has been conducting a supply chain review amid security concerns about Huawei.
A cabinet leak blamed on Gavin Williamson, the former defence secretary, suggested the forthcoming DCMS report would seek to prevent 5G operators from deploying Huawei in the core but allow them to make use of its radio equipment.
But UK authorities have recently come under renewed US pressure to impose a blanket 5G ban on Huawei. And regardless of the DCMS recommendations, a ban on US component sales to Huawei might force BT to fall back on other radio suppliers.
Nokia is likely to be at the front of the queue for additional work because it already supplies BT's radio access network (RAN) outside the urban areas where Huawei is the provider.
Quizzed about contingency plans in the event of radio trouble for Huawei, Watson said: "We already have two vendors in the radio access network and, yes, we will adapt to whatever changes there are. I am thinking through should we have three [vendors] … It depends where the DCMS review gets to on the supply chain."
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Marc Allera, EE's CEO, told reporters this morning that his company aims to have 5G up and running at 1,500 mobile sites by the end of this year, representing 8% of EE's network masts. Those masts, he said, currently account for about 25% of all data traffic.
Under plans to upgrade about 100 sites a month to 5G, EE will have about 2,000 5G sites in operation this time next year if all goes well.
Asked by Light Reading if the recent US moves could threaten the 5G rollout, Allera said: "At the moment, we have no instructions to change plans, but it is important to say that we have a multivendor policy and architecture that we are rolling out and our core and RAN will be made up of a number of providers. Huawei is a part of that but not the only part."
Allera also confirmed that Huawei's 5G smartphones will not feature in the range of devices it sells to customers until there is more confidence about the Chinese vendor's products. The decision comes after Google responded to the US blacklisting of Huawei by indicating it will stop providing parts of the Android operating system to the Chinese company.
"We have put Huawei devices on pause until there is more information on that -- this is an industry that is adaptive and you have to react -- until we have long-term assurance that customers will be supported, we have put the devices on pause," he said.
In a stay of execution, US authorities have issued 90-day licenses to various companies that deal with Huawei, minimizing the short-term impact of moves by Trump and the Commerce Department.
— Iain Morris, International Editor, Light Reading
International Editor, Light Reading
Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).
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