After the UK government banned the use of telecommunications equipment made by Huawei, the company faced a noticeable decline in its profits and revenue in the region.
For those unaware, equipment made from the Chinese tech giant was banned by the local government from being used in the country’s 5G networking infrastructure. This meant that local telecom operators can no longer source telecommunications equipment from the company. Furthermore, the government also mandated that carriers have to phase out any equipment from the Chinese brand completely by the year 2027. Meaning, Huawei is essentially cut off from the 5G network in the UK.
According to an FinancialTimes report, a source stated that the company’s sales in 2020 were down by 27 percent year on year, reaching just 913 million Pounds (roughly 1.28 billion US Dollars). On the other hand, the company’s operating profit was down to a quarter, amounting to just 36.4 million Pounds (roughly 51.3 million US Dollars) before tax. Although, the vendor’s profits did benefit from a 26 million Pounds in costs due to the reduction in employee and travel expenses during this time.
While the UK unit of Huawei is a relatively small division of the company, it is also a symbol of the struggles that the brand is facing in various countries. After placing various sanctions on the telecom equipment maker, the US government also pressured other nations, including the UK, to ban the company from supplying gear for core 5G networks. Initially, the company was allowed to supply 5G in a limited capacity, but has since been banned completely from the network.
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