Telus Corp. is blaming Ottawa's ban on China鈥檚 Huawei Technologies Inc. for pausing its fibre optic network build in the city of St. Albert and some other Alberta communities, raising questions over the sanction's spillover effects on connectivity in smaller communities.
The delay leaves many neighbourhoods in the city of about 70,000 without access to Telus' PureFibre home internet network. The Vancouver-based company originally announced the $100-million project in 2019 to connect more than 90 per cent of St. Albert homes and businesses to its fibre optic network by the end of 2020.
During a council meeting last month, St. Albert's director of information technology Joanne Graham told councillors that Telus informed the city on April 28 it had paused its PureFibre build "in all communities in Alberta with the exception of communities where they had a contract or a partnership with the municipality."
In addition to factors such as high inflation and interest rates, Graham said Telus "very predominantly" cited the fallout of the federal government's ban on Huawei technology.
"They have had to dismantle the Huawei infrastructure on all of their antennas and so primarily we're seeing pressures on the capital that they had available for all the builds across Alberta," she said.
The federal government announced in May 2022 it was banning Huawei from involvement in Canada's 5G wireless network, along with ZTE, another Chinese state-backed telecommunications firm, though it had been mulling the move since 2019.
Canadian companies were given until June 2024 to remove or terminate 5G equipment from Huawei and ZTE, along with a deadline of December 2027 to get rid of existing 4G equipment provided by the Chinese companies.
In 2020, Telus announced it would be working with Sweden's Ericsson and Finland's Nokia as suppliers for its 5G network, ditching previous plans to rely on Huawei equipment for the rollout. Prior to that switch, Telus had warned the deployment of its 5G network could be delayed and be more expensive than anticipated if Ottawa went through with a ban on Huawei equipment.
Telus, which at the time used Huawei radio equipment in non-core portions of its 3G and 4G wireless networks, said in 2019 it did not believe Huawei posed a major risk to national security.
St. Albert councillor Mike Killick said the delay in the PureFibre rollout is felt by local residents, particularly those in older neighbourhoods that have yet to be retrofitted, as he highlighted the faster internet speeds and increased reliability that the technology is meant to provide.
"Some people on one side of the street can get the service and on the other side of the street they can't," said Killick, whose motion at council, which passed, called on Mayor Cathy Heron to write a letter to Telus requesting the company honour its original commitment.
"I certainly hear from all kinds of residents that are looking for this kind of service and are frustrated that there's a pause on expanding for their neighbourhoods."
In a statement, Telus said it is committed to keeping St. Albert residents, businesses and customers updated on the progress of its PureFibre rollout once it resumes. The company did not answer questions regarding when that would be, as well as the effect of the Huawei ban and where else in Alberta it has paused its fibre network build.
"Telus has completed more than two thirds of our PureFibre build in St. Albert, bringing our most advanced broadband Internet technology to the community," said spokeswoman Brandi Merker.
"We understand how important connectivity is for the City of St. Albert and we are investing more than $7.2 million now through 2027 in network infrastructure, operations and spectrum to support vital network connectivity in the community."
Innovation, Science And Economic Development Canada did not respond to a request for comment by deadline.
Canada's Huawei ban is in line with many of its allies. The U.S., U.K. and Australia have similarly blocked the Chinese company from participating in their 5G rollouts over security concerns, while last week the Financial Times reported the European Union is considering a ban on its members using Huawei equipment.
Telus should have been better prepared for the effect of Canada's Huawei ban, said Gregory Taylor, an associate professor with University of Calgary鈥檚 communications, media and film department.
Taylor said the Canadian government "really dragged their feet" on imposing the ban compared to other countries, "largely to help accommodate the infrastructure that was being built" by companies such as Telus.
"It's an impact that they should have seen coming since 2017 when the U.S. decides that they're going to ban Huawei in their infrastructure," he said.
"It was fairly clear that Canada was going to eventually follow suit. So this expense, yes, it is a substantial expense for the infrastructure providers in Canada, but it's one that they've had ample time to see coming."
But Taylor called the blame being placed on the Huawei ban now a "red herring," suggesting that Telus is looking for ways to limit its spending given a decrease in profit reported in its latest quarter compared to last year.
"I think this is an excuse being put forth by Telus but I don't think it really holds up to much scrutiny at all because Canada was the last of the Five Eyes countries to put in the Huawei ban," said Taylor.
He also criticized the state of competition by telecommunications providers in Alberta in light of the merger of Rogers Communications Inc. and Shaw Communications Inc. earlier this year.
"Rogers is right now kind of restructuring, trying to figure out how they're going to work this with bringing Shaw into the Rogers fold and I think that Telus recognizes that for this moment, they don't face the same competition that they did," he said.
Whatever the reason, Killick said it's imperative that the delay doesn't increase disparities in internet connectivity, both within the town and compared with the level of service available in major cities across the country.
"We know it takes time, obviously, to build it out," the local councillor said. "But we just hope that we can find a way to continue to encourage Telus to do that and provide service across St. Albert to all residents."
This report by The Canadian Press was first published June 13, 2023.
Companies in this story: (TSX:T)
Sammy Hudes, The Canadian Press
