BT says cap on Huawei in UK networks will cost it £500m

LONDON: BT Group said Britain’s decision to limit Huawei’s role in building 5G and fibre networks would increase the cost of its gigabit-communications plan by about £500 million over five years.

Philip Jansen, chief executive of Britain’s biggest broadband and mobile provider, said he welcomed the clarity around the use of vendors such as Huawei, a long-standing BT partner.

“[We] agree that the priority should be the security of the UK’s communications infrastructure,” he said in a third-quarter trading update on Thursday.

“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 reported a worse-than-expected 3 per cent drop in third-quarter revenue to £5.78 billion, saying it was impacted by regulation, competition and legacy product declines.

Core earnings were also below market forecasts, down 4 per cent to £1.98 billion, which the company blamed on the fall in revenue, higher spectrum fees, investment in customer experience and higher operating costs in its networks arm Openreach.

Analysts were expecting the company to report total group revenue of £5.83 billion and core earnings of £1.99 billion, according to a company-supplied consensus.

BT said it remained on track for the year, although its free cash flow would be in the lower half of its 1.9 billion to 2.1 billion guidance range.