OSLO (Reuters) - Telenor expects to decide on its supplier of 5G technology in the fourth quarter of 2019, its CEO told Reuters, despite having as yet no clarification from Norwegian authorities as to whether Huawei can be one of them.
The Nordic country’s government has for months been assessing measures to reduce potential vulnerabilities in its telecoms industry and, like other U.S. allies, is under pressure from Washington not to allow the Chinese company as a supplier.
State-controlled Telenor signed its first major contract with Huawei in 2009, a deal that helped pave the way for the Chinese firm’s global expansion.
Telenor used Huawei to replace its entire mobile service infrastructure in its home country, in a major upgrade to its systems. Both companies’ headquarters in Norway are on the same campus on the outskirts of Oslo.
In June, Telenor - which has 178 million subscribers across eight countries in Europe and Asia - was awarded its first 5G frequency by the Norwegian telecoms authority.
“I think we will make a decision on the 5G technology vendor in the end of this year, Q4, and Norway will be the first market where we will roll out 5G,” Telenor Chief Executive Sigve Brekke said in an interview on the sidelines of a news conference.
“The plan is to make some commercial launches in Norway in 2020 ... If we don’t have any clarity, we won’t be able to do that, but the current plan is to do that. But the picture changes almost every week.”
Brekke declined to give details on Telenor’s discussions with the government, which is also its main owner, on the Huawei issue.
Telenor and rival Telia currently use 4G Huawei equipment in Norway and are testing equipment from the Chinese company in their experimental 5G networks.
It is also running 5G equipment tests with Huawei rivals Ericsson and Nokia.
Telenor shares were down 4% at 1056 GMT, lagging an Oslo benchmark index down 0.88% after softening its outlook guidance and posting flat second-quarter earnings year-on-year.
The company expects a decline in earnings for the rest of the year, dented by problems faced at some of its Asian operations, including an “adjusted outlook” at its Malaysian operations, Digi, and a one-off provision from its Grameenphone business in Bangladesh.
The updated guidance also includes an outlook for its Thai operations, dtac, which had been excluded from the company’s guidance in the previous quarter.
“Based on this and on the results so far this year, we expect subscription and traffic revenues at about the 2018 level and a low single-digit EBITDA decline,” it said in a statement.
Brekke said these were one-offs and that Telenor’s ongoing strategy was intact. Telenor had a full overview of the problem at Grameenphone, related to how commission payments to distributors were reported, he said.
In the second quarter, Telenor reported adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 11.09 billion crowns ($1.3 billion) compared with 11.03 billion crowns in the year-ago period.
Reporting by Gwladys Fouche; Editing by Sherry Jacob-Phillips and David Evans