Vodafone to phase Huawei out of European core, but urges against RAN caps

Replacing Huawei gear in 4G networks across Europe could delay 5G rollouts by 2-5 years, Vodafone Group CEO says. (Getty Images)

Vodafone Group’s chief executive on Wednesday said the company will phase Huawei gear out of its core network across Europe over the next five years, but urged against imposing share limits on the Chinese vendor's role in the radio access network portions.

Nick Read, Vodafone Group CEO, in presenting quarterly financial results, pegged the cost of replacing Huawei from core networks in the European Union at about €200 million ($220 million). He noted Vodafone had already paused using Huawei equipment in the more security-sensitive core last year, while awaiting clarity on security measures.

Read said that he was pleased the U.K.’s recent decision on Huawei “led to a clear distinction” between the core network and non-sensitive portions, such as the radio access network (RAN).

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RELATED: U.K. allows limited Huawei role in 5G networks

 The U.K. decided to exclude Huawei, and other vendors deemed “high-risk” from the core, but allowed a restricted role in the RAN, with a hard 35% cap. Read cautioned against using a quota-based approach in the EU.

The EU last week recommend a “toolbox” for 5G network security that directs restricting access from core network functions, but gives member states more discretion when it comes to implementing guidelines for vendors like Huawei.

“We’re actively engaged with governments to explain our position for the best way to implement the toolbox,” Read said, noting that the EU has a different starting point than the U.K when it comes to Huawei.

RELATED: Britain hedges on Huawei, US senators suggest O-RAN as option

In the U.K., Vodafone said it has no exposure to so-called “high-risk” suppliers in the core or in London, and is already in compliance with the 35% limit on Huawei in Vodafone’s O2 RAN network. BT, however, said it will cost the mobile operator $658 million over five years to rip out Huawei equipment in the U.K.

The U.S had been pushing allies for an outright ban on Huawei gear over security concerns stemming from ties to the China’s government. Huawei denies allegations it could be used for state-sponsored spying or disruption.

While Vodafone is compliant with limits in the U.K., Huawei is more prevalent across other parts of Europe, where Read said Huawei equipment in the RAN is important to both Vodafone and the overall industry, “reflecting high-quality technology.”

Vodafone’s chief executive reiterated that imposing quotas on Huawei in the RAN across Europe would require the mobile operator to swap out gear in modern 4G networks, resulting in disruption to customers and potentially higher prices due to the cost.

RELATED: BT says Huawei rip-outs will cost it $658M over 5 years

Most importantly, he said, it would delay 5G rollouts by 2-5 years because of constrained operational and financial resources.

“This would hold back individual member states and Europe’s global competitiveness in a digital society,” Read said.

Instead, Vodafone is advocating for an industry-led solution to improve supply chain diversity.

“This will take time but we’re already leading long-term efforts in this direction by supporting initiatives such as open RAN,” he noted.

RELATED: Mavenir sees Huawei ban as O-RAN opportunity

Vodafone has been at the forefront trialing open RAN in the U.K., and last year issued an RFQ for O-RAN technology across its entire European footprint, inviting not only incumbent suppliers but newer suppliers as well, like Altiostar, Parallel Wireless and Mavenir.

In the U.S., meanwhile, Huawei continues to fight government efforts, this week urging the FCC not to finalize its designation of the vendor as a national security threat – which would bar Huawei from benefiting from the annual $8.5 billion Universal Service Fund.

AT&T, Dell, and Microsoft are also apparently working with the White House to develop software-based 5G alternatives to Huawei, the WSJ reported Tuesday.  

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