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BT Drops New Huawei Phones as U.S. Crackdown Starts to Bite

Thomas Seal
BT Drops New Huawei Phones as U.S. Crackdown Starts to Bite

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BT Group Plc won’t offer phones from Huawei Technologies Co. when it starts Britain’s first 5G mobile network next week, joining a growing list of wireless operators ditching the Chinese company’s handsets after the U.S. blocked it from critical suppliers.

BT decided not to include Huawei phones in its 5G launch because of uncertainty over whether they could use Android software developed by U.S. tech giant Alphabet Inc., a spokesman for the carrier said.

It will still rely heavily on Huawei, the world’s largest provider of networking gear and No. 2 smartphone vendor, as it’s supplying much of the infrastructure for the new network, alongside Finnish equipment vendor Nokia Oyj.

President Donald Trump’s move last week to put Huawei on an export blacklist threatens to cut it off from the U.S. software and semiconductors it needs to make its products. Phone companies around the world are in turn grappling with uncertainty over how they’ll access Huawei gear in the months and years to come.

Huawei’s 5G-capable smartphones are reliant on Android and under Trump’s export ban, Alphabet’s Google unit isn’t allowed to give Huawei access to the most popular version of the mobile operating system.

“We’ve put the Huawei devices on pause until we’ve got a bit more information on that,” the head of BT’s consumer division Marc Allera told reporters at a launch event.

Asian wireless operators also began to distance themselves from Huawei on Wednesday, with NTT Docomo Inc., Japan’s largest telecom operator, canceling pre-orders of its new P30 handset and KDDI Corp. saying it would indefinitely delay introduction of the phone. Taiwanese carrier Chunghwa Telecom Co. said it won’t procure new Huawei models.

Huawei Router

5G promises to fix data bottlenecks in busy areas and open up more sophisticated mobile applications such as augmented reality gaming and mapping. BT’s mobile division EE says the service will cost more than standard 4G connections. Rival Vodafone Group Plc has pledged to launch 5G services in seven cities on July 3 at the same price as 4G.

BT’s 5G service will be available across the U.K.’s six biggest cities from May 30 and will reach 16 urban areas by year-end, Allera said. Customers could buy 5G subscription plans and pre-order 5G-enabled devices from Wednesday morning.

BT will still offer a 5G home router from Huawei, according to slides shown at the launch.

EE was the first U.K. operator to offer 4G in 2012 and used Huawei gear to build the core of that network. Growing pressure on U.S. allies to restrict Huawei has forced carriers to review their ties to the company and devise back-up plans in case of bans or supply disruptions. Huawei executives have repeatedly denied its systems are vulnerable to espionage.

While BT is set to remove Huawei from its 4G core -- the gateway that connects other parts of the network -- all four of Britain’s wireless networks have been using its systems in 5G trials.

(Adds detail on Asian carriers in seventh paragraph.)

To contact the reporter on this story: Thomas Seal in London at tseal@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Thomas Pfeiffer

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