Canadians Should Not Compensate Telecoms for Picking Huawei Gear: Conservatives

According to The National Post, Conservatives are imploring the Liberal government not to spend taxpayer money to subsidize Canadian telecoms, in the event they have to replace Huawei network equipment, should the latter be banned over security concerns.

“We ask that your government categorically reject requests for compensation from Canada’s large telecommunications companies,” Conservative Public Safety critic Raquel Dancho said in a letter sent Friday to Public Safety Minister Marco Mendocino and Innovation Minister François-Philippe Champagne.

According to reports from earlier this week, several telecom companies have already approached the federal government to talk about “compensation” should the Liberals decide to ban Huawei equipment in 5G networks.

Dancho’s letter noted that Canadians already “pay some of the highest monthly fees for cellphone service in the world” and said the Canadian public “should not be forced to subsidize the private business decisions of some of Canada’s most profitable companies.”

Jagmeet Singh, leader of Canada’s New Democratic Party, also cited Canadians’ high wireless and internet bills earlier this week and said he is “very loath to talk about compensating companies that have exploited Canadians for so long.”

The Liberal government put Huawei’s potential participation in Canada’s 5G networks under review back in 2018, but a final decision on the matter has been delayed for over two years. Champagne and Prime Minister Justin Trudeau have said a decision should be expected in a matter of weeks.

With all of Canada’s Five Eyes allies having either banned or restricted Huawei equipment in next-generation networks, it is likely the federal government will lean towards barring or at least limiting Huawei’s participation as well.

While the Liberals contemplated banning Huawei equipment, Canada’s telecoms all agreed that they would turn to non-Huawei vendors to build out their 5G networks.

Compensation for telecom companies will only become an issue if the circumstances of the federal ban call for the replacement of Huawei equipment that is currently in use.

The bulk of Huawei equipment is deployed in “non-standalone” 5G networks, which are built on top of older 4G networks. Bell’s and Telus’ 4G networks use Huawei equipment, replacing which could cost each company hundreds of millions. Early estimates put replacement costs for Telus at a whopping $1 billion.

Huawei Vice President of Corporate Affairs Alykhan Velshi revealed the company has sold over $700 million worth of network gear to Canadian telcos since 2018, even though the threat of a ban was on the table.