June 3, 2019 / 12:53 PM / 5 months ago

5G in Poland to be pricier without Huawei - Orange Polska

WARSAW (Reuters) - Excluding Huawei from developing 5G infrastructure in Poland could lead to higher costs and delays in implementing the technology, the CEO of Poland’s largest telecoms operator Orange Polska told Reuters, echoing warnings from rivals.

FILE PHOTO: A woman passes in front of an Orange store in Warsaw February 12, 2013. REUTERS/Peter Andrews

Huawei faces intense scrutiny over U.S.-led allegations its equipment could be used by the Chinese government for spying. The company has repeatedly denied such allegations.

Poland’s telecoms infrastructure relies heavily on Huawei’s equipment, but Washington has told allies not to use it amid broader tensions between the United States and China over trade.

“It looks like the Chinese-American trade war is still not calming down and Huawei seems to be impacted by that. If Huawei was really excluded from 5G in Poland that would have an impact on prices and pace of the technology implementation,” Jean-François Fallacher said in an interview.

“You can imagine easily that in a field with three competitors, if you take out the most aggressive one, the prices would obviously go up. What does it mean? It means that buying equipment would be more expensive for operators, so the deployment of 5G might be slower,” he added.

Other telecoms companies in Poland and elsewhere have made a similar point.

Fallacher declined to say how much Orange Polska, a unit of France’s Orange, might invest in 5G development.

DIVIDEND, RESULTS

Orange Polska last paid a dividend in 2016, stopping the payout in order to accelerate spending on fibre, and has been investing 1.9-2.3 billion zlotys (393.46 million pounds-475.21 million pounds) a year since then.

Fallacher said the company expected fibre investments to slow down after 2020 to make room for 5G. 

“The level of investments we are having today is very high. After 2020 we are planning to keep it under control, even slightly curb it, even taking into account that we will be investing in 5G network,” he said.

“2018 was the first year when we managed to stabilise revenues and grow our profitability again. If we manage to sustain this trend our goal is to come back to paying out dividends in 2021,” he added, without giving details.

Fallacher confirmed the company’s guidance for growth in revenues and core earnings (EBITDA) after leases this year.

Reporting by Anna Koper; Editing by Mark Potter

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