The restrictions imposed wont impact the 2G, 3G or 4G networks as it is believed there is not enough security justification to do so. The announcement today is expected to delay the country's 5G rollout by a year.
ISPA Chair Andrew Glover said “The Government’s 5G announcement today provides some welcome clarity to our members who are rolling out networks and providing broadband to consumers and businesses across the UK. We look forward to further consultation with Government to determine the policy for fixed networks with a clear focus on ensuring that our members can roll out new gigabit-capable networks at pace. As the Secretary of State emphasised today, supply chain interventions have a direct impact on the speed at which networks can be rolled out, so any new restrictions need to be counter-balanced with an appropriate level of support for the sector.
“The Government has rightly made upgrading our digital communications infrastructure a priority, we now need to see a clear, ambitious plan from policymakers to help the companies that are leading this charge.”
Kevin Billings, Director and Communications Industry Principal, Pegasystems said:
“A key challenge with 5G is that it is already expensive to deploy due to the nature of the technology and increased density. Even before Mr. Dowden’s announcement today, the Huawei ruling had already made this even more costly – for example, BT’s CEO has talked about an additional £500m cost to reduce the Huawei share by 2023. Today’s ruling to exclude Huawei altogether will bump up the costs even further - not just in replacing Huawei equipment, but also other network components which have been designed to accommodate Huawei. That’s why more than ever, telcos need to manage their capital investments strategically and maximize efficiency in their operational processes, and they need the right system architecture to do that.
“There is also the impact on customer experience to consider. The expectation has already been built around 5G improving the customer experience with better and faster mobile data and access to new services. However, with the rulings around Huawei, BT and Vodafone have already warned about major network outages for customers if they have to replace multiple sites in their network at the same time (i.e. replace mast and infrastructure equipment). Therefore, telcos must take advantage of intelligent automation technologies to improve their deployment and maintenance processes and ultimately the quality of their networks.
“Lastly, with less competition in infrastructure supply, equipment costs are likely to rise - that has two potential impacts. One being the further increase in capital cost for telcos, and secondly, almost certainly increasing prices for consumers. Telecoms is a regulated market with a limited number of core network players (and recently rationalized) and in general terms, if costs rise significantly so will end-customer prices. Telcos will also need to ensure strong engagement with existing and prospective customers to manage their customer satisfaction, churn and acquisition, as there could be some unhappy people knocking at their door very soon.”