Vodafone PLC (LON:VOD) said it will remove equipment made by China’s Huawei from its European mobile networks at a cost of around £169mln.
The FTSE 100 group, which is the world’s second largest mobile operator, was reacting after the government last week gave the green light for equipment from the Chinese tech giant Huawei to be used to build the UK 5G network, but set a cap at 35% of the market from 2023.
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“We have now decided as a result of the EU toolbox and the UK government’s decision to take out Huawei from the core,” chief executive Nick Read told reporters after Vodafone issued a bullish third-quarter trading statement.
“This will take around five years to implement at a cost of approximately €200mln,” he said.
Read reported on a further improvement in organic revenue growth in the third quarter to 0.8%, up from 0.7% in the second and a 0.2% decline in the first.
A recovery in Spain and the acceleration of service growth in the UK was accompanied by news from Read that the company is on track with the separation of its European towers business and is “preparing for a potential IPO in early 2021”.
After the recently announced sale of a stake in Vodafone Egypt, Read said this “simplifies the group into two scaled regional platforms - Europe and sub-Saharan Africa - and reduces our net debt”, which stood at a massive €48.1bn at the half year.