Telefonica Deutschland outlined plans to increase investments in its network over the next two years, to expand its LTE footprint and rapidly deploy 5G, with Huawei named as a supplier.
In a statement, the German operator said it selected Huawei and Nokia as 5G RAN suppliers, ahead of a commercial launch in 2020. It opted to partner with two vendors “to create diversity” in the network and “avoid dependencies on one supplier”.
Telefonica’s decision comes despite continued uncertainty about whether the German government will block Huawei from participating in 5G rollouts. The operator said the work of both vendors would be “subject to the successful safety certification of the technology and the companies according to the legal provisions in Germany”.
Last week, Reuters reported Deutsche Telekom had halted further 5G deals as it awaits an official government stance on Huawei.
Telefonica Deutschland said it wants to significantly accelerate growth between 2020 and 2022, targeting at least a 5 per cent rise in sales and increased profitability which will, in turn, be pumped into network expansion.
To help, its board proposed a dividend cut to €0.17 per share, from €0.27 per share in 2018.
The company said it currently invests around €1 billion a year, most of which goes into its network. Between 2020 and 2022, it intends to invest around 17 per cent to 18 per cent of revenue into a nationwide LTE expansion and 5G deployment.
Telefonica plans to launch 5G in Berlin, Hamburg, Munich, Cologne and Frankfurt during Q1 2020. By 2022, it hopes to cover 30 cities and a total of 16 million people.
Commenting on the plans, CEO Markus Haas said 5G was ushering in “a growth phase” for the company.