Huawei banned from UK 5G networks

The UK government has announced that all Huawei equipment will by law need to be removed from British 5G networks by 2027, which could cost up to £2 billion and delay the roll-out of the next generation network by a number of years.

Earlier this year, the government decided that Huawei technology could only be used for non-critical infrastructure. But speaking today in the House of Commons, Oliver Dowden, the secretary of state for Digital, Culture, Media, and Sport (DCMS), said that while Huawei had always been categorised as a ‘high risk’ vendor, recent U.S. sanctions against the company led to the outright ban. The announcement followed a National Security Council meeting on the topic with the prime minister.

The US Commerce Department in May 2020 barred the selling of US technology to Huawei and any suppliers of HiSilicon, its chip division. Linda Sui, director at research firm Strategy Analytics, told The Washington Post at the time that this was “really a big hit” and that “nobody can bypass US technology.”

These sanctions, Dowden said, cast fresh doubts on the company’s ability to provide a secure network for the UK – precisely because it would struggle to run the latest, most secure technology.

Additionally, all operators will be legally barred from buying any new Huawei 5G equipment from 31 December 2020.

Beset by delays

Dowden conceded that the already-delayed 5G rollout had been impacted by the controversy surrounding the Chinese vendor, but said an outright ban will likely lead to a “cumulative delay” of two to three years and cost up to £2 billion.

Moving faster than the 2027 target set by the government would add further costs and delays, he said, and rushing to remove the vendor could risk disruption to existing telephone networks. 

This decision also required the redrafting of the Telecoms Security Bill, which Dowden had previously committed to introduce before parliament’s summer recess. The revised bill will now be introduced in the autumn.

Ahead of the decision, BT CEO Philip Jansen told the BBC it would be “impossible” to remove all of Huawei’s equipment from the UK’s telecoms infrastructure in less than 10 years. Jansen floated the figure of seven years to remove Huawei specifically from Britain’s 5G networks.

A further government consultation will explore the removal of Huawei’s equipment from non-5G networks.

Building a multi-vendor approach

To address the gap left by Huawei, Dowden suggested that “Five Eyes” partners – the governments of the UK, Canada, the USA, Australia, and New Zealand, which trade information with one another – could encourage market intervention and work to ensure the standard for network operators is a multi-vendor approach.

He described the Huawei situation as a “global market failure,” and said the UK and others had become “dangerously reliant on too few vendors.”

As part of an “ambitious diversification strategy,” Britain will collaborate with international partners across government and industry to drive competition in the market. This strategy, Dowden said, will have three prongs:

• Focus on securing the supply chains of “incumbent non-high-risk vendors” to protect those networks.
• Introduce new vendors into the market using “commercial incentives” to bring their technology to the UK.
• Build partnerships between operators and vendors to make the use of multiple vendors in a single network the industry standard.

A ‘disappointing decision’

In response, Huawei spokesperson Ed Brewster said: “This disappointing decision is bad news for anyone in the UK with a mobile phone. It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide.”

Huawei has long held the top spot in 5G infrastructure market share and is a leading provider of 5G enabled consumer devices. But it has found itself at the centre of a trade war led by the US against China, with the White House placing increasing pressure on allies to ditch the vendor. 

In Britain, Huawei has long cooperated with authorities, and had exposed all of its code for review, as well as operating a security centre in Banbury with GCHQ and industry experts, where its equipment had been combed over for security holes.

Competitors have somewhat closed the gap recently after the US-led setbacks to its operations. Ericsson is the next closest contender, while Samsung recently said it could take the lead on filling the gap for 5G in the UK.

Outside of the efforts to completely expunge Huawei from their networks, telecoms operators are also likely to feel a financial effect from the decision – Huawei is a leader in 5G, and it has successfully positioned itself as an affordable choice.