Chinese equipment giant Huawei is facing total exclusion from BT's mobile core networks, DWDM optical transport network and mobile edge compute deployment plans, a BT spokesperson has confirmed to Light Reading.
The update followed this morning's publication of a report by the UK's Financial Times newspaper, which revealed that BT Group plc (NYSE: BT; London: BTA) has already begun stripping Huawei Technologies Co. Ltd. equipment out of its 3G and 4G core networks, inherited as part of the acquisition of EE, and will not consider using it as a 5G core network supplier. (See BT Is Stripping Huawei From its Mobile Core Network – FT Report.)
The Chinese vendor is facing a backlash in Western markets where authorities say there is a risk that China could exploit "back doors" in its network gear to spy on citizens and government organizations. Australia and New Zealand have already taken steps to exclude Chinese companies from their 5G markets, while the US has warned its main service providers off using Chinese vendors since 2012. (See Europe's Telcos Fret as Walls Close In On Huawei.)
Security watchdogs in the UK warned earlier this year that shortcomings in Huawei's engineering processes had exposed new security risks. Meanwhile, Alex Younger, the head of UK intelligence agency MI6, was this week reported to have voiced some concern about Huawei during a rare public appearance at a UK event.
However, BT's spokesperson insists the moves to exclude Huawei are not a knee-jerk reaction to the latest developments. As a major government supplier, BT took a decision not to use Huawei equipment in its main intelligent network core more than a decade ago. But EE, the mobile operator BT acquired in 2016, was already a major core network customer of the Chinese vendor.
In a written statement, BT said: "In 2016, following the acquisition of EE, we began a process to remove Huawei equipment from the core of our 3G and 4G mobile networks, as part of network architecture principles in place since 2006."
"We're applying these same principles to our current RFP [request for proposal] for 5G core infrastructure. As a result, Huawei have not been included in vendor selection for our 5G core," BT added. "Huawei remains an important equipment provider outside the core network, and a valued innovation partner."
While the Financial Times reported that BT aims to finish the overhaul within two years, BT's spokesperson told Light Reading that any such target would be "ambitious." He also revealed that BT is working to remove Huawei from its optical DWDM (dense wave division multiplexing) transport network.
Moreover, BT is cutting Huawei out of any plans it has for the deployment of mobile edge computing, which involves installing the IT resources normally housed in central data facilities at smaller aggregation points much closer to end users.
Mobile edge computing could be a major opportunity for telecom operators in the 5G era, allowing them to reduce the signaling delay on data networks and provide new types of service. It might also bring operational cost savings for service providers, say proponents.
While the process to exclude Huawei from parts of the BT network may have started in 2016, the move is clearly a setback for the Chinese vendor and will raise questions about the network strategies that other Tier 1 operators are pursuing.
In Europe, Huawei is also a major supplier to German incumbent Deutsche Telekom AG (NYSE: DT), which buys radio access network (RAN) equipment from the Chinese company and is understood to use some of its core network products.
BT has indicated it will continue to maintain a RAN relationship with Huawei. Its EE subsidiary is understood to buy 4G RAN equipment from Huawei as well as Finnish rival Nokia, and it is currently testing Huawei's 5G basestations as it prepares to launch 5G services late next year. (See Huawei Has Shipped 10K 5G Basestations Outside China.)
One analyst said a decision to exclude Huawei from the core but keep it in the RAN could be seen as an "accommodation" with the Chinese. A complete ban on Chinese equipment vendors would risk some kind of trade response from the Chinese government, he said.
— Iain Morris, International Editor, Light Reading