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22 July 2019

Three Group disrupted by Huawei uncertainty

Hutchison’s Three mobile operating companies have been some of the most immediately affected by the uncertainty around Chinese 5G vendors. In Australia, the first country to follow the Trump administration’s wishes and bar Huawei from 5G networks, the third MNO – Vodafone/Three joint venture VHA – was in loud opposition, because it has a 4G network from Huawei and would have to go through a far more onerous deployment of first-phase 5G (Non-Standalone, which still uses the existing 4G core) if it had to change to a new supplier.

In Italy, Hutchison’s Wind Tre arm recently reintroduced ZTE to its network modernization contract, having initially replaced it with Ericsson because of the threatened sanctions (Ericsson still has some of the deal too – one lesson MNOs will have learned is not to issue single-source contracts). Three Scandinavia (which operates in Denmark and Sweden) is also a ZTE user, as the Chinese vendor supplied it with an innovative TDD/FDD dual-mode LTE network.

But in the UK, Three UK is going ahead with introducing Huawei equipment ot its RAN despite the doubts. Like rival EE, it will source its 5G core elsewhere – from Nokia (see separate item) – but in the RAN it is replacing Samsung equipment with Huawei’s. To ensure full interoperability between its 4G and 5G networks in the Non-Standalone phase – when both have to connect to the same core – it will actually take out the Samsung 4G systems. This is an unusual move, at a time when most operators aim to stay with their 4G incumbent for the NSA stage, and possibly move to a new vendor for their standalone 5G RANs and their cloud-native 5G cores.

Three confirmed that its contract with Huawei included replacement of the Samsung kit. “With the Huawei program we are swapping the Samsung 4G and deploying 5G,” Mike Eales, Three’s head of network services strategy and architecture, told LightReading. “With Non-Standalone the 4G underpins the 5G so it has to be the same vendor. You can’t use different vendors.”

In fact, Nokia and Ericsson have offered workarounds that would allow an operator to deploy their 5G RANs even with a different 4G incumbent, but it remains a more complicated option. Vodafone has claimed that to rip out and replace Huawei 4G base stations, which it has installed at about one-third of its 18,000 sites, would cost it hundreds of millions of pounds and delay 5G roll-out. Three has 16,700 cell sites.

Three UK is clearly assuming that the government will confirm what has already been hinted – that it will not restrict the use of Chinese equipment in the 5G RAN, though it may do in the core, which is more vulnerable to spyware.

Shaun Smith, Three’s 5G program director, said the National Cyber Security Centre has been fully involved in Three’s procurement process. If there is a harder line taken on the 5G RAN, “it would hurt all the operators in this country in a very similar way,” he said. He added: “Our brand-new core is Nokia, which is where all the intelligence is. The dumb radio kit is in the RAN and that was done with the NCSC’s oversight.”

Three will launch a fixed wireless 5G service next month and a mobile service, initially in 25 towns and cities, during the fourth quarter.

All the UK MNOs will have some 5G service by the end of the year. BT/EE is using Huawei in dense urban areas and Nokia in less densely populated places; Vodafone has Ericsson and Huawei as its main RAN vendors in 4G, with Ericsson having about two-thirds of the footprint – the balance in 5G is not clear.