BT signs 5G deal with Ericsson to help phase out Huawei equipment

Testing out internet speeds on an Oppo Reno 5G smartphone with EE’s network.

Ryan Browne | CNBC

LONDON — Sweden’s Ericsson on Wednesday announced it had been selected to supply BT with 5G radio equipment in London and other major cities in the U.K.

It comes after the British government decided to block Huawei from its fifth-generation mobile networks. The move — a reversal from a previous decision to allow “non-core” equipment from the Chinese technology giant — means U.K. carriers will have to strip out Huawei gear from their infrastructure entirely by 2027.

Ericsson is one of Huawei’s fiercest rivals in the race to develop 5G network infrastructure. The rollout of 5G has been a key issue in a technology spat between the U.S. and China, with Washington pressuring its allies to remove Huawei from their 5G networks over espionage concerns.

Huawei has frequently denied its network kit could allow China to spy on sensitive communications, insisting it is independent from the government in Beijing.

Ericsson said it would provide connectivity for customers of BT’s EE mobile unit in London, Edinburgh, Belfast and Cardiff, managing about 50% of its total 5G traffic. Earlier this year, the firm signed a contract with the U.K.’s biggest mobile operator to build out the sensitive “core” parts of its 5G infrastructure.

“Having already been selected to partner in 5G Core, we are pleased to strengthen the relationship further with this deal that will deliver high performance and secure 5G to their customers across the UK’s major cities,” Ericsson CEO Borje Ekholm said in a statement.

Ericsson’s Finnish rival, Nokia, signed a separate 5G deal with BT last month, saying the agreement would make it BT’s largest infrastructure partner. Industry sources told CNBC at the time that Nokia would account for 63% of U.K. telecoms group’s entire network, powering 11,600 of its radio sites.

Carriers around the world started switching on their 5G networks last year, promising superfast data speeds and smoother gaming and streaming experiences. But the global rollout of 5G has so far been marred by gaps in coverage. It’s expected to gather pace though with the recent launch of Apple’s iPhone 12.

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