Huawei banned from Britain's 5G telecoms network
In a controversial move by the UK Government, after years of dominating the mobile infrastructure market, Huawei has been banned from contributing to Britain’s 5G programme.
“This is a really big deal, a major concern. There will be an immediate effect on Huawei.” he adds that Huawei customers such as BT, EE and Vodafone won’t waste any time in heeding to the ban “UK operators can’t buy anything from Huawei after the end of the year but it is likely they will stop buying immediately.”
The company was told that geopolitics were behind the ban as U.S. concerns that Huawei equipment could be used by China for espionage gained traction.
“The new US measures restrict Huawei’s ability to produce important products using US technology or software... The NCSC (National Cyber Security Centre) has now reported to ministers that they have significantly changed their security assessment of Huawei’s presence in the UK 5G network. Given the uncertainty this creates around Huawei’s supply chain, the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment affected by the change in the US foreign direct product rules.”
It is expected that Huawei may encounter similar treatment around the world. Tobias Ellwood, chair of the defence committee says
“There will be a ripple effect, no doubt about it, we've been under a lot of pressure ourselves from the Five Eyes community”, the intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom and the USA.
A similar reaction elsewhere will seriously dent a business that generated nearly $43 billion in revenue for Huawei last year, roughly a third of the company’s total.
Huawei announced that in 2019 it spent $23.45bn towards stockpiling its most essential equipment sourced from US companies. The company now faces the challenge of developing a domestic chip system that competes with its current US suppliers, something that is expected to take years.
The impact of the Huawei ban is also set to cause massive disruption to UK networks. Scott Petty, Vodafone UK’s chief technology officer warned that forcing mobile operators to spend resources on replacing existing equipment could potentially delay the development of 5G in the UK by as much as two years.
The UK is exploring other 5G options. Huawei equipment has long been revered as the best value for money, switching to alternative vendors will most likely incur higher costs. Only Nokia, and Ericsson operate the technology in Europe however, Samsung and Fujitsu are also being considered.
The UK government conservatively estimates stripping all Huawei equipment from the network at 2 billion pounds. It is expected that this ‘rip and replace’ tactic will prove to be expensive and disruptive, resulting in a deterioration of service and higher costs for end users.
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