The Board of Directors of Play Communications S.A. (the “Company”) hereby assesses the foreseen impact of possible restrictions for Huawei on the implementation of 5G services by the Company’s fully owned operating subsidiary, P4 sp. z o.o. (“Play”).
The cost impact may vary depending on the time given to operators to implement the necessary changes in their networks. Play’s assumption, based on similar cases abroad, is that this period would be of 7 years.
Following a review of potential scenarios by Play, the Company foresees that the maximum scope of restrictions in a 7-year perspective would drive additional total investments of approximately PLN 0.9bn, which is much below recent media speculations.
This maximum potential cost impact includes the swap of a 4G layer, the relocation of network equipment and progressive replacement of Huawei’s 4G and 5G RAN equipment after their full depreciation.
It is important to remind that the Company uses two network vendors (Huawei and Ericsson) and has already started the process of the swap with the implementation of an independent core network for 5G which is due to be completed next year and covered by current investment plan. Moreover, the Company expects to fully switch off 2G-3G systems within the next 7 years. The Company anticipates neither any accelerated depreciation nor any cost of replacement for decommissioned 2G-3G equipment.
Despite the impact of a possible Huawei ban, the Company’s total cash capex to revenue ratio will remain within the range of telecommunications market benchmarks after completion of the accelerated own network roll out by the end of 2021.
Legal basis: Art. 17, point 1 MAR – inside information