Earlier this year, the British government rejected U.S. pressure to cut all ties with China’s Huawei in the buildout of its telecom networks. It was one of those rare moments in which a spat over telecom equipment rose to the level of a foreign policy crisis between two powerful allies.
In a move that infuriated President Donald Trump, Prime Minister Boris Johnson’s administration in February all but ignored the U.S.’s warnings, saying Huawei equipment could be used in up to 35% of the noncore parts of the U.K.’s 5G networks.
Now, Johnson’s government looks set to reverse its stance. Over the weekend, the Telegraph reported that Johnson had instructed officials to make it so Huawei—the world’s biggest network equipment supplier—would have no involvement in the country’s telecom infrastructure at all, just a few years from now.
The next day, the U.K.’s National Cyber Security Centre (NCSC)—a division of its GCHQ (Government Communications Headquarters) signals intelligence agency—announced it would be conducting a fresh review of Huawei’s involvement in British networks.
So what changed? A hardening American stance and, at least one analyst argues, the fallout of the COVID-19 pandemic.
“After COVID-19, everybody knows telecoms infrastructure is probably the most vital infrastructure we have in a society,” said John Strand, of Copenhagen-based Strand Consult. “COVID-19 has actually raised the numbers of questions about how dangerous is this, if we are dependent on companies from countries that don’t share our values.”
The explicit prompt for the new NCSC review—the organization previously concluded that it was possible to mitigate the security risks of Huawei’s equipment in a 5G network deployment—was the Trump administration’s recent launch of toughened sanctions against Huawei.
The U.S. government had already banned the sale of American parts and software to Huawei, but earlier this month it said that as of September Huawei would not be allowed to use American software and technology in the manufacturing of its products. This creates a serious supply chain problem for Huawei, as it has an impact on its use of chips sourced from factories that are located outside the U.S., but that use U.S. machinery.
Trump’s argument that Huawei poses a security threat fell largely on deaf ears. But the administration may have found a winning hand by squeezing the Chinese telecom firm’s supply chain, a move that could essentially scramble the 5G market and open the door to Huawei’s competitors. The U.S. has made no secret of the fact that it favors the likes of Ericsson and Nokia over Huawei.
Huawei heatedly responded to the White House’s latest move, saying it “threatens to undermine the entire [telecom] industry worldwide.” Huawei chairman Guo Ping even went so far as to say the company now has to “work hard to figure out how to survive.”
This of course raises the stakes for governments and operators looking to roll out 5G based on Huawei gear: Security concerns are one thing, but the continued viability of the vendor is quite another.
“Following the U.S. announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have to the U.K.’s networks,” the organization said Sunday. Asked Tuesday whether the focus would be on security or supply chain issues, an NCSC spokesperson said: “A bit of both.”
“It’s very difficult to know what the impact of U.S. supply restrictions will be without doing a teardown of [Huawei’s network equipment],” said William Webb, the former head of British telecom regulator Ofcom and current CEO of the Weightless SIG, a standards body for the Internet of things.
“The reports I have seen suggest it may be material, at least for a while until Huawei manages to find alternative supplies,” he said. “In that case, yes, there is clearly a risk for U.K. operators that if they continue to rely on Huawei there will be shortages of equipment. I would have thought this would only really impact network expansion and 5G upgrade—as opposed to running existing networks.”
Webb said security fears about Huawei equipment were likely “overdone,” and suggests the ongoing furor over the firm is more about geopolitics. But Strand, a notable hawk on Huawei within the analyst community, sees the two as inseparable.
Referring to China’s ban on Norwegian salmon following the award of a Nobel Peace Prize to human rights activist Liu Xiaobo, and China’s threat to retaliate against the German auto industry if Germany rejected Huawei’s 5G equipment, he said President Trump had “opened governments’ eyes around the world and said, ‘Is it smart if a modern Western society becomes dependent on equipment [from] a company from a country which threatens countries if they don’t accept the bad things the Chinese government is doing?’”
Huawei had not responded to a request for comment at the time of writing.
