China’s Huawei Technologies Co. is planning to overhaul its global software systems as it tries to avoid a ban in the U.K. and other European markets, after previous piecemeal fixes failed to assuage national security concerns, according to people familiar with the matter.
Huawei is set to commit at least $2 billion in spending to make its equipment less vulnerable to hacking and snooping, said the people, who declined to be identified because the discussions are private.
Huawei will offer to transform the way it engineers software, instead of merely applying one-off changes and workarounds in response to specific demands from companies and governments, and that work will continue until all security concerns are assuaged, they said.
The pledge comes at a critical moment for Huawei’s ambitions in Europe, its second-biggest market outside of Asia. European phone companies are on the cusp of ordering tens of billions of euros worth of equipment for fifth-generation wireless networks and Huawei has spent more than a decade positioning itself to win much of that work.
Its plans are now under threat as Western governments grow increasingly concerned that Huawei’s systems could be used as a Trojan horse by Chinese intelligence. Its reputation suffered a further blow when Chief Financial Officer Wanzhou Meng, the daughter of Huawei founder Ren Zhengfei, was arrested in Canada on Dec. 1 following allegations it had violated sanctions against Iran, amid a wider tussle on trade between the U.S. and China.
Huawei declined to comment. The company has always maintained that it’s independent and doesn’t give the government access to its equipment.
Company officials will present the details of the software revamp to Britain’s National Cyber Security Centre in coming days before it presents it to the public, said one of the people.
The measures would move beyond smaller-scale fixes it has made in response to a critical July report by a body staffed with intelligence officials and industry representatives.
In a sign of how tenuous Huawei’s position in the U.K. has become, the head of foreign intelligence agency MI6 said on Monday the government needs to decide whether Huawei should be banned from the country’s 5G networks.
In the last four months it has received bans on 5G from the U.K.’s intelligence-sharing allies Australia and New Zealand, led by a campaign from the U.S., where it is also banned.