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Rip and replace is such a long Huawei to go, UK telcos plead, citing 'blackouts' and 'billion pound' costs: Are Vodafone and BT playing 'Project Fear'?

Not sure they spent that much on 'high risk' kit from ZTE and Huawei, coughs analyst

Analysis The caution couldn't be more stark. In a meeting with the Commons Science and Technology Select Committee yesterday, execs from BT and Vodafone warned UK lawmakers that a deadline of 2023 to remove Huawei-made equipment from their networks will result in multi-day mobile signal losses for some customers.

"To get to zero in a three-year period would literally mean blackouts for customers on 4G and 2G, as well as 5G, throughout the country," claimed Howard Watson, chief technology and information officer of the BT Group, and a 40-year veteran of the telecoms industry.

He said BT would need at at least five years to expunge Huawei from its infrastructure, "anything less than that, we would have to stop doing 5G".

Vodafone, which uses Huawei's infrastructure in its 2G, 3G, 4G, and 5G networks, made a similar case.

Echoing those concerns, Andrea Dona, head of networks at Vodafone UK, warned that customers would lose their signal, “sometimes for a couple of days, depending on how big or how intrusive the work to be carried out is.” Like Watson, Dona has a similarly storied CV, having previously held leadership roles at Ericsson and T-Mobile.

She said Vodafone would also need to "slow down our 5G deployment" if demands to replace Huawei in "very tight time" were made. Dona said Vodafone would not have the manpower to perform this engineering task, would need to recruit and felt five to seven years was more reasonable.

The comments made by Vodafone and BT, which had both been contacted by the Committee for comment, are yet another cliffhanger in the Huawei omnibus, the latest episode of which sees the Chinese networking bogeyman at risk of losing its UK empire as a direct consequence of the ongoing US sanctions.

Earlier this month, Oliver Dowden, Secretary of State for Digital, Culture, Media, and Sport told LBC Radio that the “reliability” of Huawei was now in question. The government is expected to make a decision later this month on whether it will compel networks to remove Huawei-made equipment in its entirety.

“In relation to Huawei, we’ve had these US sanctions that were imposed a couple of months ago. I’ve asked the National Cyber Security Centre to analyse the impact of them,” Dowden told LBC’s Nick Ferrari this week.

Philip Jansen, chief exec, BT plc. Pic: BT

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“It seems likely they’re going to have a significant impact on the reliability of Huawei. I’ve just received that advice. I will be discussing that with the prime minister [Boris Johnson] and if there’s any change of policy arising from it I will make an announcement.”

No formal declaration

The government is yet to formally announce any decision. Nor has it announced a timeframe. However, there is an expectation that carriers would be given a three-year deadline. Although this is crushingly short (Watson and Dona suggested five or seven years would be required to complete the work), it would conclude before the UK's 2024 general election, and thus be immune from the usual party-political interference.

While this is (obviously) dire for Huawei, it’s also potentially hugely damaging for networks. Remember: Huawei has operated in the UK for 20 years. Most domestic networks — fixed or wireless — have drunk from the firm’s trough in that time period, tempted by equipment that was said to be cheaper and better than the equivalents from Nokia, Ericsson, and Samsung, amongst others.

Speaking to The Register, analyst Paolo Pescatore of CCS Insight highlighted that most UK providers have developed an intimate relationship with Huawei, elevating its equipment to a high level of importance. But as time as dragged on — and as Beijing has evolved into a greater geopolitical foe for the West — that relationship has developed into something of a double-edged sword.

In his testimony to the committee, Dona claimed that Vodafone would have to spend “single-figure billions” to replace Huawei’s equipment from its network. The firm previously said it would cost €200m to remove Huawei from its European core networks. That's without factoring in the non-core RAN.

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BT — historically one of Huawei’s biggest UK customers — claims it would spend £500m just to meet the government’s previous limit of 35 per cent “high risk” equipment in non-core networks.

And, as Huawei has repeatedly protested in recent months, any rip-and-replace mandate would consume the attentions of the UK’s telcos, ultimately slowing the deployment of 5G and other related technologies — like 5G standalone (SA). As one industry insider told the BBC, it would be “like doing heart surgery in the middle of a marathon.”

Echoing that sentiment, Victor Zhang, vice president of Huawei, told The Register: “Huawei’s main priority has always been to provide the mobile networks with world-leading technology so they can keep the British people connected 24/7, especially during this difficult time. The UK government should not make a hasty decision without all of the evidence. The 5G decision is vital to the UK’s 'Gigabit' strategy and the future of its digital economy.”

In short, BT and Vodafone have lots to lose from a wholesale Huawei ban. On a very basic level, it would put them at a steep competitive disadvantage, particularly when compared to rival carrier O2, which has largely shied away from Huawei in favour of kit from Nokia and Ericsson, and as such would be allowed to operate without any onerous restrictions.

But there’s an argument to be made that because BT and Vodafone have the most to lose, they’re incentivised to exaggerate the potential consequences.

One analyst, John Stand of Strand Consulting, has argued that the figures provided by BT and Vodafone don’t match the amount historically spent on “high risk” kit from ZTE and Huawei. (China's ZTE is already banned from the UK, and was also included in the category of "high risk" vendors.)

He also said that much of the existing Huawei-made kit was already due to be refreshed, as it had reached its lifespan. The figures cited by BT and Vodafone represented money that had to be spent anyway, he claimed.

The cost, however, will not be merely derived from acquiring new hardware, said Gartner's senior director of research Sylvain Fabre. Migrating network and customer data will take time (and thus, money), and telcos will also be on the hook for training engineers to manage and deploy the replacement hardware.

"For a new vendor, or when swapping kit, engineers need to qualify on the kit," Fabre explained.

Strand also argued that any downtime would make BT look poor compared with its regional competition, all of which face pressure to replace equipment from Huawei with alternatives perceived to be “safer.”

While this may be true, Gartner's Fabre pointed out that there's a lot networks can do to avoid disruption.

"The risk for outages can be minimised by dealing with limited sections of the network at a time, in the hours of low use (nighttime maintenance window) and with a roll back procedure as a backup in case of issues," he said. ®

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