14th Jul 2020 17:31
(Alliance News) - BT Group PLC said Tuesday the UK government's move to remove Chinese tech giant Huawei from the country's 5G network will cost about GBP500 million.
Shares in the FTSE 100-listed telecommunications firm closed 4.1% higher at 115.60 pence each.
UK Prime Minister Boris Johnson is set to bar Huawei from playing any role in the UK's 5G network, triggering a renewed clash with Beijing.
Johnson is chairing a meeting on Tuesday of the National Security Council, which is expected to end any involvement by the firm in building the 5G system.
The decision - following intense pressure from both the US administration of Donald Trump and backbench Tory MPs - marks a major U-turn by the government.
In January, ministers announced Huawei could play a limited role in the 5G network, despite warnings that its equipment could be used by China for espionage or to disrupt the UK's critical national infrastructure.
At the same time, BT estimated replacing Huawei equipment would cost about GBP500 million.
On Tuesday, BT confirmed the estimated implementation costs will be about GBP500 million.
"BT currently estimates that full compliance with these revised proposals would require additional activity, both in removing and replacing Huawei equipment from BT's existing mobile network, and in excluding Huawei from the 5G network that BT continues to build," BT said in a statement Tuesday.
The UK government announced a revised set of proposals to remove Huawei equipment from 5G communication networks in the UK by the end of 2027, and consult on the future use of Huawei in FTTP networks.
BT added: "However, now we have clarity on the timing, it is estimated that these costs can be absorbed within BT's initial estimated implementation cost of GBP500 million, as announced by BT on 30 January 2020 in order to comply with the previous proposal by the National Cyber Security Centre."
BT Chief Executive Philip Jansen said: "The security of our networks is an absolute priority for BT. Clearly this decision has logistical and cost implications for communications providers in the UK market - however, we believe the timescales outlined will allow us to make these changes without impacting on the coverage or resilience of our existing networks.
"It will also allow us to continue to rollout our 5G and full fibre networks without a significant impact on the timescales we've previously announced. Whilst we have provided our initial view on the estimated impact today, we will continue to evaluate the details of this decision thoroughly."
By Paul McGowan; [email protected]
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