Finland’s Nokia will replace Huawei as BT’s largest equipment provider after winning a deal to supply 5G networks across the UK, the companies announced on Tuesday.
The move is the first UK contract for the Finnish telecoms maker since Prime Minister Boris Johnson banned mobile providers in July from using equipment made by the Chinese giant in their new 5G networks.
The restriction, on national security grounds, forces mobile providers to begin switching out “high-risk vendors” from 2021, and marks a golden opportunity for Huawei’s two main rivals in the 5G market, Finland’s Nokia and Swedish Ericsson.
Companies in the UK have until 2027 to remove Huawei equipment from their 5G networks, a change which BT has said will cost it £500 million ($643m).
Under the BT deal, Nokia will supply base stations and other network equipment to allow its customers to access super-fast 5G internet.
Nokia equipment will also be installed in the company’s existing 2G and 4G networks.
However, the company told AFP it will also use other suppliers to replace the totality of its Huawei 5G equipment.
“With this next stage of our successful relationship with Nokia we will continue to lead the rollout of fixed and mobile networks to deliver stand-out experiences for customers,” BT CEO Philip Jansen said in a statement.
Although the ban on Huawei offers a significant boost to Nokia and Ericsson, industry watchers have warned that fulfilling the increasing demand left by the market leader may not be straightforward.
Nokia last year downgraded its 2020 earnings forecast in the face of fierce competition over the 5G network’s market, while previous chief executive Rajeev Suri played down delays in delivering some equipment orders.
However, the firm’s most recent results saw an increase in profit and new CEO Pekka Lundmark is expected to shake up the company to try to recover some of the ground lost to Nokia’s 5G competitors.