The British telecommunications provider has recently made rapid progress in the transition to Ericsson.
In 2016, BT spent 12.5 billion pounds (approx. HUF 5,300 billion) on the mobile operator EE. Executives knew that the UK mobile operator’s core network technology would have to be replaced sooner or later. At the telco, company rules prohibited the use of Huawei on this part of the network, although EE’s core network was provided by the controversial Chinese supplier. Nearly eight years later, after a government crackdown on high-risk suppliers, the Chinese company has been almost completely pushed out of the networks.
BT switched to a new platform based on Ericsson by the government days before the deadline has almost completed the switch, despite mainstream news saying it’s massively overdue. According to the latest legislation, the company cannot use Huawei equipment or services provided by or on behalf of Huawei in the performance of its core network functions after December 31. While the same rules apply to other UK carriers, none of them appear to rely on the Asian-based supplier for their core network. BT currently handles a negligible amount of traffic on the Chinese manufacturer’s technology.
All their 4G and 5G systems are based on Ericsson devices, only a tiny percentage of other traffic is still supported by Huawei. Work has accelerated since November, when Mark Henry, BT’s director of network strategy, reported that “millions of customers and more than 50% of traffic” had already been transferred to the new infrastructure. Towards the end of this year, the service provider announced that it had made significant progress and was working hard to complete the work.
The passage of time shows how complicated it can be to switch from one supplier to another. BT was due to remove Huawei by January this year, but managed to get an extension from the government, which apparently recognized the difficulty of meeting the previous target. Since core network technology is largely about software, one challenge is to ensure that the new system meets all the old needs. Another danger is that if the network is switched for millions of customers at the same time, there is a risk of a so-called “signalling storm”, which can overload the network and lead to outages. This alone may have forced the British company to act cautiously when transferring customers from Huawei to Ericsson.
It certainly wouldn’t do you much good to make the task harder than it really is. The core network does not represent a large financial investment compared to the much more expensive radio access network or their fiber optic lines. Although Huawei’s technology is probably fully amortized, maintaining the two core networks in parallel would entail additional costs and consume internal resources. BT also risks being fined up to 10% of revenues or 100,000 pounds (42.5 million HUF) per day for non-compliance with government regulations.
Moreover, the Chinese company is unlikely to have been an enthusiastic supporter of the transition to a competitor. The company warned of disruption to UK networks and economic damage when the government first considered a ban. Huawei has reduced its staff in the UK from more than 1,000 to around 150. Annual revenues fell from more than 1 billion pounds (423 billion forints) a few years ago to less than 200 million pounds (84.6 billion forints).
The uncertainty is whether the authorities will punish BT if there are still traces of Huawei in the system after December 31. A spokesperson for the UK’s Department for Science, Innovation and Technology said: “We will continue to work with operators to remove Huawei technology as quickly as possible, while minimizing disruption to customers, and operators remain on track to be fully operational by the end of 2027 remove it from public 5G networks. We have already imposed an immediate ban on the installation of new Huawei equipment, limiting their presence in the entire fiber infrastructure and removing the technology from national security-related sites.”
As well as removing it from the core network by the end of this year, UK operators must also ensure it is removed from their 5G radio access networks by the end of 2027. BT, Three and Vodafone use Huawei’s technology to varying degrees, but all managed to meet a deadline earlier this year to cap it at 35% of the network, either by number of sites or traffic levels. For BT, this would currently limit Huawei to around 7,000 sites.
Ofcom, the UK’s telecoms regulator, will not report back to the government until spring 2024 on how BT is progressing against the December 31 target. However, the authority did not issue an emergency signal during the period that had passed in the meantime, and BT did not request another extension. This does not preclude the possibility of government penalties. Such a penalty would be a bit like the parking fines that are issued when only the rear bumper of the car sticks out over the limits.