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Jun 2, 2020

Huawei left out as Bell, Telus select European 5G suppliers

John O'Connell discusses BCE

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MONTREAL - Huawei Technologies Inc.'s ambitions to be a player in Canada's 5G network took a major hit Tuesday as two of the country's three largest telecom companies announced partnerships with the Chinese tech giant's European rivals.

Bell Canada announced Tuesday morning that Sweden-based Ericsson will be its second supplier of the radio access network equipment that has been Huawei's main product line in Canada since entering the market in 2008. Earlier this year, Bell signed its first 5G wireless network supplier agreement with Nokia, a rival of Ericsson and China's Huawei.

Later Tuesday, Telus Corp. announced that it had also selected Ericsson, as well of Nokia of Finland, as suppliers for its 5G networks.

Neither Bell nor Telus provided details on how much their contracts with Ericsson and Nokia were worth.

Huawei's participation in the construction of Canada's 5G network has become a major sticking point between Ottawa and Washington. The U.S. has warned Canada, the United Kingdom and other allies that it will limit intelligence sharing with countries that have Huawei equipment in their 5G networks - citing the potential for spying by China, an allegation Huawei denies.

“Huawei has worked closely with Bell in Canada for many years, helping them build one of the world's leading 4G LTE networks,” Huawei Canada spokesman Alykhan Velshi said in a statement.

He added that Huawei's remains committed to Canada and looks forward to the federal government completing its 5G review and its decision about Huawei's role in Canada.

“We continue investing more than a quarter of a billion dollars a year in R&D in Canada. We continue building new research partnerships with Canada's world-class universities. As we have for more than a decade, we continue to work with our Canadian telecom partners to help them build and support state-of-the-art networks that connect Canadians,” Velshi said.

Ericsson, already a supplier of 4G LTE wireless and other technology to Bell and the main supplier for its rival Rogers Communications, also has a major research and development presence in Montreal.

Bell said Ericsson will also support its rollout of 5G-enhanced fixed wireless home internet service to rural areas, which generally have less access to land-based fibre optics networks.

On Tuesday, Bell indicated the door remains open to partnering with Huawei, depending on the outcome of the federal government’s review.

“We’re working with multiple vendors to build our 5G network – as we did with our successful buildout of 4G LTE, which included Cisco, Ericsson, Huawei, Nokia and others,” said Bell spokesperson Marc Choma in an email to BNN Bloomberg. “Huawei has been a reliable and innovative partner in the past and we would consider working with them in 5G if the federal government allows their participation.”

A spokesperson for Telus did not respond to BNN Bloomberg’s question about whether it is also open to partnering with Huawei on its 5G network if permitted by the government.

Prior to the arrest of Huawei Technologies chief financial officer Meng Wanzhou in Vancouver in December 2018, the Chinese company wasn't a household name in Canada.

Since Meng's arrest, which has sparked a major rift between China and Canada and focused worldwide attention on Huawei, the federal government has been undecided about whether the Chinese company will be allowed in Canada's 5G networks - which are currently being assembled.

Analysts have said Bell and Telus use Huawei extensively in their fourth-generation networks and would be more affected by a Huawei ban than their rival Rogers Communications, which has predominantly used Ericsson network gear.

Besides Huawei, Ericsson and Nokia, there are other companies that want a piece of the 5G network upgrades.

Samsung Electronics has announced a deal to supply equipment for Videotron's wireless network in the province of Quebec and the Ottawa region of Ontario.

With files from BNN Bloomberg

BNN Bloomberg is a division of Bell Media, which is owned by BCE.