Why Is TELUS Announcing A 5G Partnership With Huawei?

Yesterday, the news dropped that TELUS was announcing that they were going to build their 5G network in partnership with Huawei. The same Huawei that the US hates and wants everyone else to dump. It’s also the same Huawei that the Canadian government is doing a security review of. Here’s the key point from yesterday’s news:

[Doug] French [CFO – TELUS] said that the plan right now is to use Huawei gear in the radio access network (RAN) — basically, the antennas that send wireless signals to the phones — but it will not be the backbone of the Telus 5G network for now.

“In the RAN network, we will be launching a 5G network with Huawei,” French said.

Telus wouldn’t give an exact date on when they will roll out their 5G, but French said it will be coming “shortly.”

This is kind of similar to what the English are doing. Much to the ire of the US. But the real question is, why would TELUS poke the stick in the metaphorical cage by making this announcement? Well, I have some thoughts on that:

  1. This basically forces the Canadian government to make a call on Huawei. Something that they have been reluctant to do because they are working to extradite Meng Wanzhou who is the CFO of Huawei to the US to stand trial over Iran sanctions violations among other things. And in retaliation the Chinese government is holding two Canadians to force the Canadian government to release her. Now with the announcement made by TELUS, the option of waiting for that situation to be resolved is off the table. And the Canadian government has to make a call sooner rather than later.
  2. TELUS couldn’t afford to wait for a decision to be made as Rogers has already announced their 5G plans with Ericsson being their supplier. And Bell has made their announcement with Nokia being their supplier. Thus TELUS might have felt that they had no choice to make an announcement and see what happened next.
  3. TELUS is already a big Huawei customer as their 4G network has a lot of their gear in it. So they might have felt that they had no choice to use their 5G gear so that interoperability between 5G and 4G networks was seamless. Plus going with another vendor at this point would likely cause TELUS a lot of headaches and cost TELUS a lot of cash.

Here’s the risk for TELUS. Besides the fact that the Canadian government decideing to ban Huawei from selling anyone 5G gear, which would pretty much screw over TELUS. There’s the consumer backlash:

For clarity, the two Michael’s that are referred to in this tweet are Michael Kovrig and Michael Spavor who are being held by the Chinese government in retaliation for the arrest of Meng Wanzhou who is the CFO of Huawei.

The fact is that TELUS has done a lot over the last few years to differentiate themselves from Rogers and Bell in very positive ways. And their network is insanely fast relative to the other two members of the big three. But they risk burning all of that to the ground via this decision. But, if you look at it another way, they are third place and they must figure that they have nothing to lose by going down this road.

So what do I think?

I think it would be wise for TELUS to rethink this. According to a recent Angus Reid Institute study. 56 percent of Canadians believe that Huawei should be banned from participating in the deployment of 5G. That’s not trivial. Neither is the fact that about 34 percent would support a limited arrangement similar to the one the U.K. What that says to me is that most Canadians have some sort of problem with Huawei. Thus alienating most of your potential customer base because you want to do business with Huawei isn’t a good idea. Which means that they need in my opinion to take a step back and consider the implications of doing business with Huawei. To me, it doesn’t really seem to be a good idea as the risk level on multiple fronts is way too high.

2 Responses to “Why Is TELUS Announcing A 5G Partnership With Huawei?”

  1. Tim Martin Says:

    I will be leaving Telus and gladly pay more rather than give into CCP extortion. At some point the lowest price isnt the best deal given the massive subsidies given to Huwaei from the CCP. We have all been lulled into a great bargain and soon we will pay a very high price.

  2. […] get weird. Earlier this year TELUS announced that Huawei would supply gear for its 5G rollout. Something that did not go over well with customers. Which suggests that TELUS is not proceeding with Huawei. Or it suggests that this is in addition […]

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