UPDATE 1-U.S. sanctions likely to have impact on Huawei as a provider, British minister says

(Adds comments on other vendors, costs)

LONDON, June 30 (Reuters) - U.S sanctions designed to
restrict the ability of China's Huawei to source
advanced microchips for 5G equipment are likely to have an
impact on the viability of the supplier for Britain, UK media
secretary Oliver Dowden said.

Britain granted Huawei a limited role in its future 5G
networks in January but officials at the National Cyber Security
Centre (NCSC) have since been studying the impact of the U.S.
measures announced in May.

"We have, since the middle of May, had the U.S. sanctions in
respect of Huawei, so clearly given that those sanctions are
targeted at 5G ... it is likely to have an impact on the
viability of Huawei as a provider for the 5G network," Dowden
told a parliamentary committee.

Dowden said the government was in the latter stages of
reviewing the NCSC analysis. "Off the back of that, we will
determine what policy measures if necessary need to be taken in
response," he added.

British mobile operators BT, Vodafone and
Three use Huawei's equipment in their networks. BT had
said a government decision in January to limit Huawei's
involvement in 5G would cost it 500 million pounds ($600
million).

Dowden said on Tuesday that the overall impact of the
previous restrictions was roughly 1.5 billion pounds and a
one-year delay in rolling out new 5G networks.

"Clearly if we impose further restrictions there will be a
cost associated with that," he said.

He wanted more competition in the market in addition to
Huawei, Ericsson and Nokia.

"Both Samsung and NEC are obvious
vendors that we would like to get into the UK market," he said.

Dowden said he was also looking at financial incentives to
encourage operators to adopt emerging Open RAN technology, which
aims to reduce reliance on any one vendor.

(Reporting by Paul Sandle and Jack Stubbs; editing by Kate
Holton and Stephen Addison)