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UK expected to phase Huawei out of 5G networks – Financial Times

Boris Johnson is this month expected to draw up plans to phase out Huawei from Britain’s 5G phone networks, after warnings that US sanctions have undermined the Chinese telecoms equipment maker’s ability to supply the UK market.

An official security inquiry has raised “very, very serious” questions about whether Huawei can continue with its limited role as a supplier of 5G networks after the US announced sanctions in May, according to government officials.

The sanctions were aimed at cutting off the company’s access to semiconductors made with US equipment, raising fears in London that Huawei would be forced to use alternative technology with new security risks.

Mr Johnson last week said Britain was concerned about security around “hostile state vendors”, while Oliver Dowden, culture secretary, said US sanctions were “likely” to have an impact on Huawei’s viability as a supplier.

One Whitehall official said on Sunday that the impact of the US export controls was “unlike anything else” they had encountered during previous Huawei security assessments. However, the official stressed that since the sanctions would only affect new equipment, there was no need for UK network operators to immediately rip out and replace existing Huawei kit.

Britain’s National Cyber Security Centre (NCSC) wrote last month to the country’s telecoms operators to stress the need for sufficient stockpiles of equipment to keep their networks running in light of the new US sanctions and the emergency review.

John Sawers, former head of the MI6 security service, said a change in UK policy was inevitable. Writing in the Financial Times he said: “The Trump administration’s motives for trying to destroy Huawei can be debated.

“But the latest US sanctions . . . mean that reliable non-Chinese suppliers to Huawei can no longer work with the company. UK intelligence services can therefore no longer provide the needed assurances that Chinese-made equipment is still safe to use in the UK’s telecoms network.”

Huawei said: “Huawei is the most scrutinised vendor in the world and we firmly believe our unrivalled transparency in the UK means we can continue to be trusted to play a part in Britain’s gigabit upgrade.”

Downing Street declined to comment, but government officials confirmed privately that policy was set to change because of the new security advice coming from the NCSC, a branch of the GCHQ signals intelligence agency.

A ban on provision of new equipment by Huawei, which the government agreed in January should be allowed up to a 35 per cent stake in the 5G market, would slow down the government’s rollout of the new mobile phone networks.

A report by the NCSC has now been passed to ministers, including Mr Dowden, who are evaluating the government’s response.

Asked by MPs last week whether it was a case of “not if, but when” the UK would remove all high-risk vendors, including Huawei, from its telecoms networks, Mr Dowden appeared to agree. “But there is a big difference as to the path to getting to that point,” he said.

Tory MPs critical of China want Huawei’s equipment removed swiftly from Britain’s networks, but Mr Dowden’s allies have not denied reports that he favours a longer phase-out lasting until 2029.

China’s imposition of a new security law in Hong Kong has heightened tension between London and Beijing, with Tory MPs demanding that Mr Johnson takes a firm stance in his dealings with the Chinese company.

Telecoms companies have already been adjusting their plans to roll out 5G to comply with the caps set in January to limit the use of Huawei equipment to 35 per cent by 2023.

A move to ban the sale of new equipment would probably force networks to use equipment from the Scandinavian players or alternative suppliers, including NEC or Samsung, from next year when stocks run dry. 

The industry has warned that a move to ban Huawei completely and force networks to rip out existing equipment would cost Britain its early lead in 5G and scupper the prime minister’s election pledge to upgrade Britain’s telecoms networks to “gigabit speeds” by 2025.

The cost of replacing existing 4G, 5G and broadband equipment could skyrocket if a narrow timeframe, such as the existing 2023 deadline pushed by some rebel conservative MPs, is set. That would eat into the budgets of the country’s telecoms networks, which could start to demand compensation to switch out older Huawei equipment.

A longer “glide path” to phasing out Huawei equipment would allow telecoms companies to gradually replace the Chinese company’s equipment at lower cost and with less disruption.


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