Vodafone Group (NASDAQ:VOD) has announced that in the next five years, it will do away with Huawei equipment from the core parts of its wireless networks across Europe.
Replacing Huawei equipment to cost $220 million
The company CEO Nick Read stated that the move will cost the European telecom around $220 million. This move comes following the UK’s move last week to limit the use of Huawei equipment in the building of the 5G network. However, carriers will use some of the equipment in the 5G deployment provided they do not integrate the equipment into the core and sensitive parts of the network. Similarly, the government put a 35% limit on Huawei equipment that the companies cannot exceed even if they are using it in masts and cell towers.
Read indicated that the replacement program will have a minimal financial implication on the company’s UK operations since they were already compliant with government measures. He, however, warned that if the rest of the European countries followed the 35% cup passed by the UK on Huawei equipment on non-core parts of wireless networks such as towers and masts that will delay 5G rollout by around two to five years.
In the UK, Carriers should not use Huawei equipment in the core of the 5G network in instances that require the processing of data. Similarly, the equipment is banned from military bases and nuclear sites.
Putting caps in other European countries will delay 5G rollout
The Vodafone CEO stated that if other countries followed to put caps on the equipment, the company will divert most of the money meant for 5G rollout to replacing the Huawei equipment. He added that such a move will be highly disruptive, and they don’t expect to have caps in the rest of Europe.
So far, no other European nation has indicated that it will introduce limits like the ones instituted by the UK. With Huawei now taken out of the core 5G networks in the UK, operators will be looking to Ericsson (NASDAQ: ERIC) and Nokia (NYSE: NOK) for supplies.
