Telus confirms it will use Huawei in ‘initial module’ of 5G rollout

Telus Corp. will be using Huawei Technologies Co. Ltd. equipment in its initial 5G launch, the company said following a day in which the company’s CEO and CFO had seemingly contradictory messages on the issue. In an emailed statement from Telus chief financial officer Doug French Thursday, the Vancouver-based company said it would move forward with Huawei gear, despite the government’s ongoing review of whether or not to ban gear from the Chinese company from Canada’s 5G networks. Telus “will begin rolling out its 5G network shortly, and our initial module will be with Huawei,” French said in the statement. The company’s request-for-proposals “process is underway and we continue to explore supplier diversification. As 5G and 4G technology and network components are interoperable, it is natural that we build from our 4G supplier ecosystem, while continuing to collaborate with the Canadian government,” French said. A company spokesperson said in an email that the “initial module” referred to by French is the “first phase of the 5G roll out as full deployment won’t be complete until after the 3500 MHz spectrum auction takes place.” On the fourth quarter earnings call Thursday afternoon in response to a question about the timeline for its 5G rollout, CEO Darren Entwistle had said he didn’t want to “pre-announce our 5G launch plans for competitive reasons.” “Clearly this is something we’re going to do in 2020, I’m just not going to step beyond that from a specificity point of view,” Entwistle said. “As we progress into 5G we want to still be, obviously, the global leader in wireless technology, and we don’t intend to yield that distinction. But then in an interview with the Financial Post Thursday, French said: “We’re going to launch 5G with Huawei out of the gate.” Telus has been lobbying the federal government not to put a ban on the use of Huawei 5G equipment in the radio access network (RAN) since at least February of last year, warning that 5G networks in Canada would be “greatly delayed” as a result of a ban. “Given the critical role of 4G infrastructure in delivering 5G capabilities, a full ban on Huawei for 5G will force operators to replace their existing 4G Huawei equipment — an expensive and complex proposition over an elongated timeframe,” Telus told the government last year in documents obtained by the Wire Report. The initial 5G rollouts will use much of the same RAN equipment as existing 4G LTE networks, where both Telus and BCE Inc. already have extensive amounts of Huawei equipment. Under the Canadian Security Establishment’s security review program, Canada has already effectively banned Huawei from the more sensitive “core” parts of existing 3G, and 4G LTE networks, and Telus has maintained that it does not want to use Huawei gear in the core of any upcoming 5G network. A Telus executive speaking on condition of anonymity last year told the Wire Report that the company had ruled out Nokia Corp. as a supplier. “We don’t think that it’s workable for us as a tier one carrier,” the Telus executive said. Last week, Bell announced that it would be using Nokia equipment in its own initial 5G build-out. “What I’m trying to signal here is we need to be able to work with many equipment suppliers today and in the future and today that includes Nokia, it includes Huawei, it includes , it includes ,” CEO Mirko Bibic said on Bell’s fourth quarter earnings call. Quebecor Inc. has said it will use Samsung Electronics Co. Ltd. in its own 5G rollout. While the extent of Telus’s use of Huawei equipment in the RAN of its 4G network -- and the company’s desire to use the Chinese telecom giant’s equipment in the 5G RAN -- have been known for some time, today’s announcement that it would move forward with Huawei triggered a condemnation from Conservative Shadow Minister for Public Safety Pierre Paul-Hus. “On the same day a major telecommunications company announced their intention to launch a 5G network in Canada later this year using Huawei Technologies, the United States charged Huawei with 16 counts, including ‘conspiracy to steal trade secrets’. This should concern all Canadians,” the statement said. “Justin Trudeau and his Liberal government must take immediate action to protect our national security and Canadians’ privacy and ban Huawei from Canada’s 5G network.” The previous federal government adjusted its timing on when the public can expect the decision on a possible Huawei ban many times. Late January, Innovation Minister Navdeep Bains said on a conference call with reporters from Davos in Switzerland that he has been “engaging the telecommunications sector” and “working with Minister Blair and our national security agencies with experts.” “We’re doing our due diligence to make sure that any decision that we make is in the best interest of Canadians, and that’s currently the process that we’re undertaking,” he said at the time. He said that process involves “doing a thorough examination of all the relevant facts and engaging with all the relevant stakeholders, including our allies, to understand their thought process before we come to any decision more broadly speaking on 5G and how we deploy it. Elsewhere on the fourth quarterly earnings call, Telus trumpeted the results of a recent OpenSignal report on network speeds. “Telus is clearly the network leader in Canada and amongst the very best globally, a clear differentiator for our organization. And I would say a terrific springboard and positioning on the eve of 5G being commercialized in our country,” CEO Darren Entwhistle told analysts on the Thursday call. Telus operating revenues were up slightly from $3.76 billion in the fourth quarter of 2018 to $3.86 billion in the final quarter of 2019, accounting for an increase in net income from $368 million to $379 million. The increase reflected “growth in wireless network revenue and wireline data services revenues, partly offset by the continuing declines in wireline legacy voice and legacy data service revenues,” according to Telus’s financial statement. In wireless, Telus had 130,000 net additions in the quarter, a 8.5 per cent drop from the 142,000 they added in the fourth quarter of 2018, bringing the company to 10.21 million total wireless subscribers, compared to 9.67 million total subscribers at the end of 2018. Wireless average revenue per unit (ARPU) was down 1.7 per cent to $59.29 from $60.29. In wireline, Telus added 28,000 internet subscribers, the same number they added in the fourth quarter of 2018, for a total of 1.98 million internet subscribers at the end of 2019. In television, Telus added 15,000 subscribers, nine thousand less than the 24,000 they added in the same period last year, for a total of 1.16 million television subscribers at years’ end. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telus confirms it will use Huawei in ‘initial module’ of 5G rollout

News | February 13, 2020

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Telus confirms it will use Huawei in ‘initial module’ of 5G rollout

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