The diplomatic argument between Huawei and Canada could result in financial losses of at least $1 billion CAD for Telus (TSE: T) and Bell (TSE: BCE).
Currently at the heart of a diplomatic quarrel over national security, Huawei products have already been banned from the United States, Australia and New Zealand. It is now Canada’s turn to position itself. However, Ottawa is under intense pressure from Telus and Bell not to do the same, as they have already adopted Huawei to develop their fifth-generation telecommunications networks.
Telus insists that Huawei has a technological advantage over its competitors, estimated between 12 and 18 months ahead in terms of research and development time. Huawei’s equipment receives calls, text messages and other user data before entering the Telus network. However, the management of Telus raises that Huawei does not pose a risk to security, since the equipment is not used for its main network itself, but for a RAN (Radio Access Network) allowing the connection of devices to the network. Scott Bardsley, a spokesperson for the Canadian Department of Public Safety, says Canada will focus on protecting people from potential threats.
As Nokia, Ericson and Huawei are fighting for the control of the development of 5G technology in Canada, Ottawa took advantage of the World Economic Forum last January to announce $40 million CAD funding at Nokia’s research center. The decision to ban Huawei in Canada, however, is still waiting.
List of references
TVA Nouvelles. (25 janvier 2019). Ottawa verse 40 millions $ à Nokia [En ligne]. Disponible : https://www.tvanouvelles.ca/2019/01/25/ottawa-verse-40-millions–a-nokia
Vancouver Sun. (18 janvie 2019). Telus, Huawei await feds’ next move on telecom security concerns. [En ligne]. Disponible : https://vancouversun.com/news/local-news/telus-huawei-await-feds-next-move-on-telecom-security-concerns