Why the UK Hung Up on Huawei 5G and What Happens Next

Washington has threatened to stop U.S-U.K. intelligence sharing if Britain doesn't cut ties with Huawei.

Chinese President Xi Jinping (L) is shown around the offices of Chinese tech firm Huawei technologies by its President Ren Zhengfei in London during his state visit on October 21, 2015.
AFP PHOTO / POOL / Matthew Lloyd (Photo credit should read MATTHEW LLOYD/AFP/Getty Images) MATTHEW LLOYD/AFP/Getty Images

As the pandemic weighs on the already strained U.S.-China relations, some of America’s allies are forced to walk back on major business deals with China. On Tuesday, the U.K. government said it will no longer allow Chinese telecom giant Huawei to participate in the country’s 5G network construction, reversing a January decision to give the company a limited role in building Britain’s 5G infrastructure.

The ban is expected to delay the rollout of 5G in the U.K. by at least a year and could harm the country’s broader economic relationship with Chinese companies, but U.K. officials said recent U.S. sanctions imposed on Huawei left them with no other choice.

“Given the uncertainty this creates around Huawei’s supply chain, the U.K. can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment,” the U.K. Digital and Culture Minister Oliver Dowden said on Tuesday.

Huawei Walking on Tight Rope in UK

Huawei has operated in Britain for 20 years. The firm is already an integral part of the country’s 4G infrastructure. Last year, before Brexit was made official, Europe accounted for nearly a quarter of Huawei’s global sales.

But the U.K.’s National Security Council (NSC), which conducted a security and technical analysis for the government’s 5G supply chain review, has said it “has never ‘trusted’ Huawei,” raising concerns over the company’s suspicious ties to the Chinese Communist Party. The agency considers Huawei a high-risk vendor and formed a special cyber security evaluation team on the company 10 years ago.

When granting Huawei access to Britain’s 5G project in January, the NSC asked British companies “to use Huawei in a limited way so we can collectively manage the risk” and advised other countries against contracting Huawei in similar projects unless they have a robust regulatory system.

Following Tuesday’s ban, telecom operators, including BT and Vodafone, will have until 2027 to remove existing Huawei equipment from their 5G networks. Existing 4G operators will not be required to cut ties with Huawei.

Pressure from Trump Administration

Huawei is already among several Chinese tech firms that face severe opposition in the U.S. due to geopolitical tensions. In May, at the height of the coronavirus pandemic, the U.S. Commerce Department slapped a new set of sanctions on Huawei that further reduced its ability to source components and technologies for U.S. companies. Some of those technologies are essential in building 5G base stations and equipment.

Last month, U.S. Secretary of State Mike Pompeo declared that “the tide is turning against Huawei as citizens around the world are waking up to the danger of the Chinese Communist Party’s surveillance state.”

To push America’s biggest allies to cut ties with Huawei, Washington has warned that U.S.-U.K. intelligence sharing and military collaboration could be put at risk if Britain kept Huawei in the 5G construction project.

What’s Next for U.K.’s 5G Network?

Huawei says Britain’s blanket ban was disappointing but has no plan to appeal the decision. “It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide,” Ed Brewster, a spokesperson for Huawei U.K., said on Tuesday. “Regrettably our future in the U.K. has become politicized, this is about U.S. trade policy and not security.”

The void left by Huawei will mostly be filled by European firms Nokia and Ericsson, the only two companies that analysts believe are capable of providing 5G.

Why the UK Hung Up on Huawei 5G and What Happens Next