Britain’s biggest landline network has brought on an Alabama company as a new supplier to help cut its reliance on China’s Huawei Technologies Co. and ramp up construction of a nationwide fiber-optic system.
BT Group Plc’s infrastructure unit Openreach signed a long-term contract to bring in Huntsville’s Adtran Inc. alongside Huawei and Finland’s Nokia Oyj as a strategic partner. Adding an American component-maker will help London-based BT limit the use of China’s Huawei technology in its fiber-optic network and meet national security rules. Adtran and BT didn’t disclose financial terms.
In January, Britain capped at 35% the amount of data that can be carried over Huawei’s full-fiber and 5G equipment, and gave networks three years to comply. The move dealt a blow to the Shenzhen-based vendor, but stopped short of U.S. demands for an outright ban.
Huawei makes up 44% of the U.K.’s full-fiber market, according to the government. BT said overhauling systems to obey the rules may cost it $611 million, though mainly it pointed to the changes it needs to make to wireless towers.
“It helps Openreach to be able to execute on their plan and still abide by those requirements,” said Jay Wilson, Adtran’s chief revenue officer. The contract could make up a 10th of Adtran sales during the peak of its build, he added. Adtran supplies some of BT’s small startup rivals, as well as big U.S. carriers like AT&T and European peers like Deutsche Telekom AG.
The contract comes a week after BT accelerated its planned fiber rollout, pledging to connect 20 million premises by the mid- to late-2020s, if conditions allow. It scrapped dividend payments to help pay for the pledge, and rivals Telefonica SA and Liberty Global Plc announced the same morning that they were merging their U.K. units to create a stronger rival to the former state monopoly.
Bloomberg first reported Openreach’s search for a new supplier in November 2019. Peter Bell, the company’s network technologies director, said the Adtran deal will help the U.K. “bounce back from the COVID-19 pandemic” with a better broadband network. The U.K. has lagged behind European neighbors in building out glass-based fiber connections, relying instead on lower-bandwidth, copper-transmitted wires.
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