UK mobile phone providers are banned from buying new Huawei 5G equipment after December 31, and they must also remove all of the Chinese firm’s 5G kit from their networks by 2027.
Digital Secretary Oliver Dowden informed the House of Commons of the decision.
It follows sanctions imposed by Washington, which claims the company poses a threat to national security, something Huawei denies.
Dowden said the move would delay the country’s 5G implementation by one year.
Technology promises faster internet speeds and the ability to support more wireless devices, which should be a boon to everything from mobile games to higher-quality video broadcasts, and even on time in driverless cars that communicate with each other . 5G connections are already available in dozens of UK cities and towns, but coverage may be poor.
Dowden added that the cumulative cost of the moves when combined with previous announced restrictions against Huawei would be up to £ 2 billion.
“This has not been an easy decision, but it is the right one for the UK’s telecommunications networks, for our national security and our economy, both now and in the long term,” he said.
Because the US sanctions only affect future equipment, the government has been informed that there is no security justification for removing the 2G, 3G and 4G equipment supplied by Huawei.
However, by swapping the company’s masts, the networks are likely to switch to a different provider to provide the services of the previous generation.
Huawei said the move was: “Bad news for anyone in the UK with a mobile phone” and threatened to “move Britain to the digital slow line, increase bills and widen the digital divide.”
The action, however, does not affect Huawei’s ability to sell its smartphones to consumers or how they will work.
Broadband switch
New restrictions will also apply to the use of the company’s broadband kit.
Operators are told they should “stop buying” new Huawei equipment for use in full fiber networks, ideally in the next two years.
Dowden said the government “would embark on a brief technical consultation” with industry leaders on this.
He explained that the UK should avoid becoming dependent on Nokia, which is currently the only other provider used for some equipment, and wanted to avoid “unnecessary delays” for the government’s promise of gigabit for all by 2025.
BT’s Openreach division told the BBC that, in fact, it had recently reached an agreement to buy a full fiber network kit from a new supplier, the American firm Adtran, but the first deliveries would only start in 2021.
Chip problems
The UK last reviewed Huawei’s role in its telecommunications infrastructure in January, when it decided to let the company remain a provider, but introduced a limit on its market share.
But in May, the United States introduced new sanctions designed to disrupt Huawei’s ability to make its own chips. The Trump administration claims that Huawei provides a gateway for China to spy on and potentially attack countries that use its equipment, suggestions that the company firmly rejects.
The sanctions led security officials to conclude that they could no longer guarantee the security of its products if the company had to start sourcing chips from third parties for use on its equipment.
Media playback is not supported on your device
The minister cited a review by GCHQ’s National Cyber Security Center as the motivation for the changes.
The center has said that Huawei products adapted to use third-party chips “will likely suffer more security and reliability problems.”
But other political considerations are also likely to have come into play, including the UK’s desire to strike a trade deal with the US, and mounting tensions with China over its handling of the coronavirus outbreak and its treatment of Hong Kong.
Some Tory deputies from the bank pushed for a shorter period of time for its removal, in particular, there were calls for the 5G ban to take effect before the upcoming elections in May 2024.
However, Mr. Dowden said that “the shorter the timetable for phase-out, the greater the risk of actual disruption to mobile phone networks.”
BT and Vodafone had warned that customers could face mobile blackouts if they were forced to remove the entire Huawei 5G kit in less time.
Shadow labor technology minister Chi Onwurah said the government was unable to resolve “this disaster on its own.”
“He refused to face reality” and was “negligently incomprehensible” in allowing things to get to this point, he added, and now a group of experts needed to be created.
Hopes from the government that this decision may put the Huawei issue to bed may be optimistic.
The reason we are here again despite a decision in January is because one of the key players, the United States, played a new card in the form of sanctions.
And there is still time between now and the legislation that will come to Parliament in the fall for others to do the same, be they conservatives or Beijing.
In the long run, many countries will watch closely how China reacts.
Will you feel you need to punish the UK to discourage others from following your lead in 5G? Or do you want to avoid being seen as a stalker and prefer to try to influence the decision in a more subtle way? Whatever the case may be, Huawei’s UK story is not over yet.
President resigns
Huawei says it employs around 1,600 people in the UK and claims to be one of Britain’s largest sources of investment from China.
The company, whose shares are not publicly traded, does not provide a regional breakdown of its earnings. But on Monday, it announced a 13% increase in sales for the first half of 2020 compared to the same period in 2019, totaling 454 billion yuan ($ 64.8 billion; £ 51.3 billion).
The UK will have accounted for a fraction of that. The head of the UK firm recently noted that Huawei had only deployed a total of 20,000 5G base stations, the mast-mounted radio receiver / transmitter equipment, in the UK so far. Rather, it expects to deliver a total of 500,000 globally this year.
Still, what the firm fears and Washington hopes is that other countries will now follow Westminster’s example with their own bans.
Although there appears to be little chance of a U-turn, Huawei said it was still urging UK ministers to reconsider.
“We will be doing a detailed review of what today’s announcement means for our business here and working with the UK government to explain how we can continue to contribute to a better connected Britain,” said spokesman Ed Brewster.
Shortly before the announcement, Sky News revealed that Lord Browne, the president of Huawei in the UK and the former chief executive of BP, would leave the Chinese company before his term expired. He said he had given his notice a few days ago and would formally resign in September.
Lord Browne will resign six months before his time at Huawei ends
Lord Browne had led efforts to improve the company’s image in the United Kingdom and had tried to avoid a ban.
“It has been central to our commitment here for 20 years, and we appreciate your valuable contribution,” Huawei said, confirming the report.
Industry reaction
BT will become the telecommunications operator most affected by the decision, as it runs both the EE mobile network and Openreach, which provides fixed line infrastructure to individual Internet providers.
“We need to further analyze the details and implications of this decision before considering the potential costs and impacts,” he said.
However, the move should benefit Nokia and Ericsson, which are the other two main providers of 5G kits.
“We have the capacity and experience to replace all Huawei equipment on UK networks at scale and speed … with minimal impact on people using our customers’ networks,” said Nokia.
Ericsson added: “Today’s decision removes the uncertainty that slowed investment decisions surrounding the rollout of 5G in the UK … and we are ready to work with UK operators to meet their schedule.”
However, both companies manufacture some of their 5G equipment in China, which has also caused concern in Washington.
In June, the US Department of Defense released a list of 20 companies that it claims had close ties to the Chinese military.
It included Panda Electronics, the firm with which Ericsson jointly manages a manufacturing facility in the Chinese city of Nanjing.
“Many companies assemble equipment or have some form of manufacturing in China,” Ericsson’s head of corporate communications Peter Olofsson told the BBC when asked about this.
“Our business compliance people have seen this [list] and concluded that it is not something that has an impact on Ericsson or our operations. “
