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Vodafone to remove Huawei kit from European core networks

(Image credit: Vodafone UK)

Vodafone plans to remove Huawei kit from its core mobile networks in Europe but says the impact of the UK government’s decision to impose a cap on equipment from ‘high risk vendors’ (HRVs) will be minimal.

Last week, it was confirmed that UK operators would be allowed to use Huawei gear in the radio layer of their 5G networks but this would be limited to 35 per cent of masts and traffic.

The government also formally banned the use of HRVs in sensitive parts of the network.

Vodafone Huawei

Vodafone CEO Nick Read said it would have to swap a small amount of kit in the UK but was most compliant. Like its competitors, Vodafone UK had no intention of using Huawei as a supplier for its 5G core.

However it does use Huawei’s products for its core infrastructure in Spain and in Eastern Europe. Following the decision by Westminster, and recent guidance from the EU, it will remove this equipment at a cost of €200 million over the next five years.

However Read warned that should the EU replicate the UK’s 35 per cent cap on the use of Huawei gear in the radio layer of 5G, the rollout of next generation networks could be delayed by as much as five years. He also suggested that the increased costs could be passed on to European consumers.

The comments came as Read presented the company’s Q3 results. Organic service revenue rose by 0.8 percent to €9.73billion during the period, with the company emphasising its pursuit of a ‘digital-first’ operating model and the maximisation of its assets.

Read said the spin-off of its European tower assets into a separate TowerCo was progressing well and that it was preparing for a potential IPO in early 2021, depending on market conditions.

“I am pleased with the pace at which we have executed our commercial and strategic priorities, which has allowed us to maintain our momentum in the quarter,” said Read. “Competition in Europe remains challenging, primarily in the value segment, however we continued to improve customer loyalty and to grow in broadband, and we achieved good growth in Africa. We expect a further gradual improvement in service revenue growth in Q4, led by Europe.”

In the UK, service revenue rose by 0.6 per cent thanks to a higher customer base and the success of Vodafone’s new unlimited data plans. The company said it added 134,000 new contract customers during the period and had 2 million subscribers to its new tariffs.