UPDATE 2-Telus warns of higher 5G costs if Canada bans Huawei

(Adds Telus’ comments on Huawei, shares)

Feb 14 (Reuters) - Telecom company Telus Corp said on Thursday it expects costs related to setting up fifth-generation (5G) wireless network to escalate if the Canadian government bans Chinese tech giant Huawei Technologies.

The Vancouver-based company said in a filing the setting up and deployment of 5G technology could be impacted, and the Canadian telecom market could undergo a "structural change" if such a ban came into place.

The 5G technology is expected to greatly enhance speed, coverage and lead to almost no lag time in wireless networks.

The government of Canada is currently studying the security implications of 5G networks.

Ottawa is also locked in a bilateral dispute with China after Canadian authorities arrested Huawei’s Chief Financial Officer Meng Wanzhou in December, on a U.S. extradition request.

Huawei faces international scrutiny over its ties with the Chinese government and suspicion Beijing could use its technology for spying, something the company has denied.

UK’s BT Group and France’s Orange have said they will not use its 5G equipment in their core national networks.

Separately, the company reported profit in line with estimates, adding 112,000 total net wireless subscribers in the quarter ended Dec. 31, but the figure was 9,000 lower than a year ago.

Telus, which faces stiff competition from rivals BCE Inc and Rogers Communications Inc in the wireless space, earned an adjusted profit of 69 Canadian cents per share, in line with analysts’ average estimates, according to IBES data from Refinitiv.

The Vancouver-based company reported net income of C$368 million ($277.44 million), or 60 Canadian cents per share, in the fourth-quarter ended Dec. 31.

Total operating revenue rose 6.3 percent to C$3.76 billion.

Telus shares were up 0.74 percent at C$47.24 in morning trading. ($1 = 1.3264 Canadian dollars) (Reporting by Shanti S Nair in Bengaluru; Editing by Shailesh Kuber)