U.K. Huawei decision gives Canada cover to not execute an outright ban: analyst

The U.K.’s decision to give Huawei a limited role in the deployment of 5G gives Canada cover, according to Scotiabank’s analysis.

The bank’s telecom analyst Jeff Fan writes that the “U.K.’s decision provides Canada with cover to not execute an outright ban on Huawei for 5G. We also believe the relatively muted U.S. response to the U.K.’s decision provides additional reassurance for Canada to follow the latter.”

The report from Fan outlines that the uncertainty that Telus and Bell have faced over the past year in regards to the use of Huawei equipment will end soon.

Fan also writes that the government’s decision on whether it will allow the use of Huawei equipment in 5G infrastructure will impact the timing and cost of 5G deployment. He says that it will also affect the breadth and depth of 5G coverage, and the operators’ competitive positions.

U.K. Prime Minister Boris Johnson has said that “high-risk vendors” will be able to participate in the “non-sensitive” parts of the deployment of 5G. He ruled that they cannot participate in more than 35 percent of the deployment.

Fan says that the U.K.’s decision to allow Huawei at the edge of the networks, and not in the core, are consistent with Telus and Bell’s architecture since they began deploying Huawei over 10 years ago.

“On the 35 percent cap, there was very little scientific reasoning provided in the decision. The cap may be more necessary for the United Kingdom, given how extensively Huawei is deployed in that country. It is our belief that the situation is different in Canada,” Fan writes.

Innovation Minister Navdeep Bains has said that the government is studying the U.K.’s decision, but has not provided a timeline regarding Canada’s own Huawei review.