UK's BT Group adds US fiber supplier to limit its reliance on Huawei gear

[LONDON] Britain's biggest landline network has brought on a new supplier to help cut its reliance on China's Huawei Technologies and ramp up construction of a nationwide fiber-optic system.

BT Group's infrastructure unit Openreach signed a long-term contract to bring in US firm Adtran alongside Huawei and Finland's Nokia 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. The parties didn't disclose financial terms.

In January, Britain capped the amount of data that can be carried over Huawei's full-fiber and 5G equipment at 35 per cent, and gave networks three years to comply. The move dealt to a blow to the Shenzhen-based vendor, but stopped short of US demands for an outright ban.

Huawei makes up 44 per cent of the UK's full-fiber market, according to the government. BT said overhauling systems to obey the rules may cost it 500 million pounds (S$869.1 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," Jay Wilson, Adtran's chief revenue officer, said in an interview. The contract could make up a 10th of Adtran sales during the peak of its build, he added. The Huntsville, Alabama-based company also supplies some of BT's small startup rivals, as well as big US carriers like AT&T and European peers like Deutsche Telekom.

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 also scrapped dividend payments to help pay for the pledge, and rivals Telefonica and Liberty Global announced the same morning that they were merging their UK units to create a stronger rival to the former state monopoly.

Bloomberg first reported Openreach's search for a new supplier in November. Peter Bell, the company's network technologies director, said in a statement that the Adtran deal would help the UK "bounce back from the Covid-19 pandemic" with a better broadband network. The UK has lagged behind European neighbours in building out glass-based fiber connections, relying instead on lower-bandwidth, copper-transmitted wires.

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