BT reports £500m hit as UK limits Huawei 5G role

Britain caps Huawei's share of market at 35%

LONDON: British telecoms group BT on Thursday said it would take a £500 million hit after the UK government limited Huawei's role in developing the country's 5G network on security grounds.

The cost, equivalent to $650 million or €590 million, will be spread over five years, BT said in a statement as the British company must now make changes to its 5G rollout plans after London's move on the Chinese telecoms company.

"We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around £500 million over the next five years," BT chief executive Philip Jansen said in a statement.

He added that the company welcomed the government's decision, announced Tuesday, noting that "the priority should be the security of the UK's communications infrastructure".

BT said the move by London would require changes to the company's own network.

Meanwhile the move to grant Huawei access, albeit on a limited scale, has caused a diplomatic spat between Britain and the US, with Washington having pressed for a total ban.

Britain chose to exclude Huawei from "core" parts of the network and cap its share of the market at 35%.

However, US officials have said that the possibility of China using its commercial presence to spy on Britain - or even shut down the network - could force Washington to stop sharing intelligence with London.

Washington has banned Huawei from the rollout of the fifth-generation mobile network because of concerns that the firm could ultimately be under the control of Beijing, an allegation it strongly denies.

A total ban requires huge amounts of infrastructure to be ripped out at great expense, while also delaying 5G rollouts by years, according to analysts.

Unlike the US, Britain has been using Huawei technology in its systems for the past 15 years.

Huawei is widely viewed as providing the most advanced 5G for the super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.

Current providers of fifth-generation network infrastructure in Britain include Nokia and Ericsson, while non-core elements are counted as antennae and base stations attached to masts and roofs.

A number of UK mobile phone operators, including EE and Vodafone, currently sell 5G services - but it is so far available only in a handful of cities, notably London and Birmingham.