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The imminent financial impact of the UK government’s ban on using Huawei equipment on 5G networks has come to light after the Chinese company revealed the declining revenue and profits of its British unit.
Last summer it was told British telecommunications companies that they would be forbidden to buy the 5G equipment of the Chinese company from January 2021 and should remove the equipment they had already installed in 2027.
This gave companies like Vodafone and BT the opportunity to store spare equipment last year as they prepared for a post-Huawei market from 2021 by signing supply contracts with Ericsson, Nokia or players. smaller looking fill the gap in the market left by the ban on the world’s largest telecommunications equipment company.
Huawei Technologies, the UK’s operating unit, said revenue in 2020 fell 27% to £ 913 million, while operating profits, before interest and taxes, fell a quarter to £ 913 million. £ 36.4 million. The profit figure benefited from a reduction in expenses of £ 26 million during the period due to the reduction in travel and employee costs.
He paid a £ 90 million dividend to his parent company, up from £ 55 million in 2019.
The UK business is a relatively small division of Huawei’s larger business, which had revenue of $ 137 billion ($ 97 billion) by 2020 with operating profits of up to $ 11 billion ($ 7.8 billion). dollars) for the year.
Still, the British business became a symbol of Huawei’s difficulties last year after the British government made an impressive change of direction by initially deciding to allow limited use of Huawei’s 5G equipment.
Britain had long been the Chinese company’s gateway to the world and Huawei had gone so far as to fund a testing center, run by British security services, to assure the government and industry that its equipment was safe.
Lord Browne, the former CEO of BP, resigned last year as chairman of Huawei Technologies. Sir Mike Rake, BT’s former chief executive, followed suit in March this year.
Huawei said: “Political decisions have not only had a real impact on our UK business, the people we employ and our customers, but they will delay the launch of 5G and put Britain on the slow digital lane.”
U.S. authorities led the indictment against Huawei, pressuring countries around the world to stop using the company to supply equipment for critical networks. One step to stop American companies supplying Huawei meant it was unable to use software for its consumer products, such as Android-based smartphones, and struggled to get chips.
The full impact of the UK government’s ban is likely to be evident in the 2021 accounts as the 5G equipment block starts. The Chinese company still operates in the country supplying broadband equipment and has significant research resources. He is persevering with a plan to build a new photon installation outside Cambridge despite a government ban.
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