In a move that signaled a security concern, the British government has finally reversed its decision to allow Huawei into its 5G network following Trump’s campaign against the Chinese company.
Trump on several occasions had advised the Boris government not to use Huawei Technology’s equipment in its new high-speed 5G wireless network citing security issues.
Early this year, Britain had pledged not to ban equipment made by the Chinese technology giant.
This has been the achilles heel of United States of America’s campaign against Huawei, an embarrassment as its closest security ally has ignored its pleas for a ban.
Now the embarrassment is over, the U.S. has its victory, and Huawei has been dealt a serious blow.
Even better for the U.S. government is the fact this very public U-turn comes as a direct result of the most recent U.S. sanctions. The U.S. campaign is getting more advanced, more targeted, more effective. The U.K. government described the security implications of those recent U.S. sanctions as “severe,” changing the advice, sending a message to the world that Huawei’s risk has significantly increased.
The U.K. did not want to ban its telcos from buying Huawei equipment—reports suggest this sets back the country’s rollout and comes at a cost. That has been the commercial equation all along—can the U.K. afford to turn its back on cheaper Chinese tech to opt instead for more costly, and they have argued less performant alternatives. To say nothing of the expensive rip and replace of network equipment that has already been installed.
But Washington’s rule change to prohibit Huawei from using silicon that relies on U.S. technology in its design, development or fabrication, made some form of change inevitable. The U.S. knew what it was doing. That explains Huawei using its March presentation of its 2019 results to specifically campaign against such a move and the barrage of threats from China as to consequences for the U.K.
The new Huawei issue is that the specialist evaluation team under the purview of Britain’s GCHQ spy agency says it can no longer guarantee that security risks can be mitigated. Replacing American technology in Huawei kit with Chinese alternatives is a material adverse change. As I’ve said before, if the spooks change their advice then the U.K. government would be forced to move—they have changed and it has moved.
That said, security hawks in the U.K. argue that the change is still a fudge of sorts—essentially standalone 5G equipment purchases are being stopped with a ban on new sales from January. But the current hybrid equipment that uplifts 4G to 5G doesn’t need to be ripped and replaced until 2027. That’s too far away, runs the argument. There is also no action on the widely installed 3G/4G infrastructure.
“I welcome very strongly the Government’s move to block Huawei from UK 5G infrastructure from next year,” Bob Seely MP, coordinator of the Huawei Interest Group, said in a statement. “It is a good, first decision. It is, however, a partial decision—I believe that MPs will have concerns about elements of the statement, including no ban on 3G and 4G and a rip-out date for 5G far into the distance.”
Meanwhile, Huawei is seriously impacted by the news—having celebrated January’s decision as a major victory. “This disappointing decision is bad news for anyone in the U.K. with a mobile phone,” a company spokesperson said. “It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide—We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the U.K. Regrettably, our future in the U.K. has become politicized, this is about U.S. trade policy and not security.”
The U.S. has now hit two devastating strikes on Huawei, targeting the two highest profile parts of its business. Last year, the initial sanctions removed Google GOOGL -0.9% software and services from the company’s smartphones. That has heavily impacted sales of phones outside China, where Google is banned in any case. Sales of new flagships launched since U.S. sanctions took effect, the Mate 30 and P40, have disappointed. The company has shored up performance by increasing its domestic revenue base.
Now the hit on Huawei’s silicon supply chain has achieved what more than a year of lobbying failed—it has pulled the flagship U.K. market away from Huawei. America no longer has the embarrassment of its primary defense and intelligence ally allowing Huawei to sell its network equipment in the country. Trump was left furious by the news in January, he will be in fine mood after today’s confirmation of the U-turn that has been widely expected for some weeks now.
The Huawei news was widely expected. For the U.K. hawks it does not go far enough, and it’s likely that Huawei will be celebrating the relatively long timescale before any rip and replace needs to take place. Seven years is a long time in politics—a lot can change, and for a country about to enter the uncertainty of Brexit, China will inevitably wield continual influence over swathes of its economy.