“Given the uncertainty this creates around Huawei’s supply chain, the UK can no longer trust that it will be able to guarantee the safety of future Huawei 5G equipment,” Dowden said.
The U.S. campaign against Huawei was mixed success until new sanctions in May further reduced the company’s ability to manufacture and obtain semiconductor chips using U.S.-made technology.
That triggered another UK security review of the company’s involvement in the British network, prompting the National Security Council’s decision Tuesday to order the phasing out of its technology.
The decision is a blow to Huawei, which has operated in Britain for 20 years. Europe is a key market for the company, accounting for 24% of sales last year. Huawei announced half-year results earlier than usual on Monday, reporting slower revenue growth. The company is already experiencing a decline in smartphone sales, after Washington blocked access to popular Google apps. As a result, the phones became much less attractive in markets outside of China.
Huawei said it was confident that recent US sanctions would not have affected “the resilience or safety” of its products and described the UK announcement as disappointing.
“It threatens to move Britain to the digital slow line, increase bills and deepen the digital divide,” said Ed Brewster, a spokesman for Huawei in the UK.
“Based on the current direct export rule the United States put in, I really believe Huawei’s 5G equipment business is in grave danger,” Jefferies analyst Edison Lee said last month.
British Prime Minister Boris Johnson had faced mounting pressure from lawmakers within his own party, along with the Trump administration, which argues that the Chinese government could use Huawei to spy on and even sabotage.
Washington had warned that the intelligence exchange and military collaboration between the United States and the United Kingdom could be put at risk if Britain went ahead with its plan. Under Chinese law, Chinese companies can be ordered to act under the direction of Beijing. Huawei has consistently denied that it would help the Chinese government spy, saying it is “100% employee-owned.”
Speaking early Tuesday before the UK announcement, the Chinese Foreign Ministry repeated a previous warning from its ambassador that the decision would have consequences for the broader relationship between the two countries.
“If the UK can provide an open, fair and non-discriminatory trading environment for Chinese companies … it is a decisive test for British markets after Brexit, and it is also an indicator of China’s investment in the UK” , said Foreign Ministry spokesman Zhao. Lijian said.
Huawei is already an integral part of Britain’s existing 4G infrastructure, and telecom operators will not be required to change the company’s equipment on those networks.
The European rivals of the Chinese company said they were ready to fill the 5G gap left by Huawei.
– Sherisse Pham contributed to this article.
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