Australia’s TPG Telecom has called time on its planned mobile network rollout as a result of its reliance on equipment provided by Chinese vendor Huawei. According to Reuters the Australian government’s decision to ban Huawei’s equipment on security grounds is responsible for the network rollout cancellation. In August 2018 the federal government blocked the telecoms from rolling out Australia’s 5G network saying the involvement of any companies ‘likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law’ presented too much of a risk.
TPG had selected the Chinese vendor as its supplier for the to-be-constructed network, as it believed doing so would allow for a simple upgrade path from 4G to 5G technology. However, in light of the government ban, the company was cited as saying: ‘That upgrade path has now been blocked … It does not make commercial sense to invest further shareholder funds.’ It is understood that the decision to halt the infrastructure deployment now was taken as the project was at a stage where TPG would have needed to place orders for new equipment to continue.
Despite the development, meanwhile, TPG has said it does not expect any impact on its earnings guidance for the current financial year.