BCE Inc. announces Nokia as ‘first’ 5G partner, hikes dividend 5%

Originally Published by Financial Post
Author: James McLeod

The choice of a 5G equipment supplier has been a hot topic in the telecom world for more than a year

As part of its fourth-quarter earnings report, BCE Inc. announced that it will use Nokia equipment to build its Canadian 5G network.

Bell said that it intends to deliver initial 5G service later this year.

“As part of our mobile 5G strategy, Bell today announced our first 5G network equipment supplier agreement with long-time partner Nokia,” the company said in its earnings news release. “The Finnish company has quickly become a leading international vendor of 5G network solutions with more than 60 commercial 5G contracts with wireless carriers worldwide.”

BCE reported 123,582 net new wireless customers and 35,639 net new retail internet customers. The company’s operating revenues for the fourth quarter of 2019 was 6.316 billion, up 1.6 per cent year over year.

For 2020, Bell is forecasting revenue growth of one to three per cent, and capital expenditure intensity of approximately 16.5 per cent. The company is forecasting an annualized dividend of $3.33 up five per cent from $3.17 in 2019.

But it’s the 5G choice that will likely drive the most attention, because it is seen in the industry as a key decision for the future of network infrastructure.

The choice of a 5G equipment supplier has been a hot topic in the telecom world for more than a year, as network operators prepare to build their next-generation systems.

There are only a few serious suppliers of 5G network equipment, including Nokia, Ericsson, and Chinese company Huawei Technologies Co. For a variety of reasons, Huawei gear is substantially cheaper than either Nokia or Ericsson.

National security experts, especially in the United States, have warned that using Huawei gear in Canadian networks could constitute a critical threat to key national infrastructure, because it could create a backdoor to allow the Chinese to spy on Canadian communications.

The federal government has not yet made a decision on whether to allow companies to use Huawei, but earlier this month the United Kingdom announced that telecoms in that country could use a limited amount Huawei gear at the periphery of the network, but the equipment could not be used in core systems.

Already, Bell’s rival wireless network operator Rogers Communications Inc. has announced that it has turned on its 5G network in four Canadian cities. Bell has some Huawei equipment already in its 4G network, and notably, the earnings release framed Nokia as “first” 5G equipment supplier, which may leave the door open to Huawei gear in the future.

Read original article at business.financialpost.com.