Vodafone CEO says banning Huawei could set Europe's 5G rollout back another two years

Key Points
  • China's Huawei, Finland's Nokia and Sweden's Ericsson are the three biggest providers of telecommunications equipment in the world, accounting for more than half of revenues in the market, according to research firm Dell'Oro Group.
  • "If we concentrate it down to two players I think that's an unhealthy position not just for us as an industry but also for national infrastructure in the country," Vodafone CEO Nick Read said.
Vodafone Chief Executive Officer Nick Read speaks at the Mobile World Congress (MWC) in Barcelona on February 25, 2019.
Lluis Gene | AFP | Getty Images

The CEO of the world's second-largest mobile operator warned excluding Huawei from Europe's 5G networks could be "hugely disruptive" to national infrastructure and consumers, comments that will likely be welcomed by the Chinese company as it faces possible equipment bans around the world.

Speaking at a press conference at Mobile World Congress in Barcelona Monday, Vodafone CEO Nick Read said banning Huawei from providing 5G infrastructure in Europe would hamper competition in the supply chain. China's Huawei, Finland's Nokia and Sweden's Ericsson are the three biggest providers of telecommunications equipment in the world, accounting for more than half of revenues in the market, according to research firm Dell'Oro Group.

"If we concentrate it down to two players I think that's an unhealthy position not just for us as an industry but also for national infrastructure in the country," Read said.

On Monday in Barcelona, Huawei and Vodafone touted their commercial partnership with a 5G demonstration at the event. The British firm relies on the Chinese company's equipment to run many of its networks.

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Read added that it would be "very very expensive" for operators and consumers if companies were forced to swap their Huawei equipment in favor of competitors', adding it would delay Europe's 5G rollout by "probably two years."

"It structurally disadvantages Europe," he said "Of course the U.S. don't have that problem because they don't put Huawei equipment in."

Huawei is the world's largest telecommunications equipment provider and has captured key markets by offering high-tech gear at a lower cost than its rivals.

But the company has effectively been left out of the U.S. market with officials citing concerns that its technology could enable spying from the Chinese government, accusations Huawei denies. In addition to the U.S., the U.K. and Germany are weighing possible bans on Huawei's 5G equipment citing security risks.

In January, Vodafone announced it would "pause" deploying Huawei equipment in its European core networks, but Read said the company has continued to roll out Huawei's 5G radio equipment at pace across Europe. He said governments need to take a "fact-based" approach to assessing security concerns with Huawei, adding he will not be meeting with any U.S. officials in Barcelona this week.

"I would at this stage prefer to be working with governments and securities on a national basis and making sure we have a fact-based conversation," he said.

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Earlier on Monday, Ericsson CEO Borje Ekholm told CNBC's Jon Fortt Huawei security concerns are creating uncertainty among operators.

"It's very speculative, we have no idea what's going to happen," he said. Meanwhile, Nokia CEO Rajeev Suri told CNBC's Karen Tso Sunday he is watching Huawei developments "closely."

Vodafone's Read said there is "high competition" among the three equipment providers but added Huawei has had "leading technology." In a roundtable with media on Sunday in Barcelona, Huawei's rotating chairman Guo Ping claimed the company is 12 months ahead of its competitors when it comes to 5G technology.

Superfast 5G mobile internet is expected to revolutionize the digital economy by enabling new technologies such as self-driving cars and the internet of things.

The Vodafone Group is the world's second-largest mobile operator by subscribers, with around 700 million globally.

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Correction: This story has been updated to correct Nokia CEO's name.