D-day has finally arrived for Huawei in Britain: UK.gov will outlaw the purchase of Huawei gear to build 5G networks by the end of this year, and from 2027 the country's mobile networks must eradicate the Chinese vendor's kit from their 5G infrastructure.
This decision was a long time in the making, and comes off the back of sustained pressure from the US government to ban the integration of Huawei equipment from next generation mobile networks.
Had the government opted for the previously mooted deadline of 2023, UK networks would have faced significant short-term costs, and according to the networks themselves these would be compounded by lengthy blackouts and delays to the rollout of 5G.
Confirming the decision, Oliver Dowden MP, the Secretary of State for the Department of Culture, Media and Sport (DCMS), claimed that further US sanctions on Huawei imposed in May had a "significant, material" change on the firm's ability to supply the UK market.
This prompted the government to seek a review of Huawei's situation by the National Cyber Security Centre (NCSC), which ultimately concluded the Chinese firm was materially compromised by the sanctions.
Speaking to the House of Commons, Dowden warned the decision to exclude Huawei would have material consequences, not just for the balance sheet of the UK's networks, but also for the medium-term rollout of the national 5G network.
"Today's decision to ban the procurement of new Huawei 5G equipment by a year will delay rollout by a year and add half a billion [pounds] to costs," he said.
"By the time of the next election, we will have implemented in law, an irreversible path for the complete removal of Huawei equipment from our 5G networks. Mr Speaker, we have not taken this decision lightly. And I must be frank about the decision's consequences for every constituency in this country.
"This will delay our rollout of 5G. Our decisions in January had already set back that rollout and cost up to a billion pounds.
"Today's decision to ban the procurement of new Huawei 5G equipment from the end of this year will delay rollout by further year and will add up to half a billion pounds to costs. Requiring operators, in addition, to remove Huawei equipment from their 5G networks by 2027 will add hundreds of millions of pounds further to the cost and further delay rolled out."
These numbers are exacerbated further by the requirement to strip networks of existing Huawei-made kit, with Dowden warning of a "cumulative delay of two to three" years and costs of up to £2bn.
Labour's Chi Onwurah, shadow minister for Science, Research and Digital, was critical of the government's overall strategy towards Huawei, describing it as "incomprehensibly negligent" and calling the current lot the "special relationship poodle" of the US.
"The current education secretary was sacked as defence secretary for leaking parts of the Security Service's advice on Huawei – and then the government went on to ignore large parts of it," she said.
"In January, the foreign secretary said, in a statement to this house, that they [the government] would legislate at the earliest opportunity on high risk vendors. Then they refused to work with us [Labour] and their own backbenchers to do so," she added.
Huawei: 'Our future in the UK has become politicised'
Predictably, Huawei has criticised today's decision, describing it as "bad news for anyone in the UK with a mobile phone."
"It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide. Instead of 'levelling up' the government is levelling down and we urge them to reconsider. We remain confident that the new US restrictions would not have affected the resilience or security of the products we supply to the UK," said Huawei spokesperson Ed Brewster.
"Regrettably our future in the UK has become politicised, this is about US trade policy and not security. Over the past 20 years, Huawei has focused on building a better connected UK. As a responsible business, we will continue to support our customers as we have always done."
Brewster said Huawei will "conduct a detailed review" about what today's decision means for its business, pledging to work with the government to "explain how we can continue to contribute to a better connected Britain."
Reliance on Huawei a 'global market failure'
Although Huawei's ongoing woes are the direct result of sanctions against the firm, combined with intense lobbying pressure from the US government, Dowden was nonetheless critical about a "global market failure" that led to networks being over-reliant on too few vendors.
Presently, the 5G space is dominated by a troika of three large vendors – Ericsson, Nokia, and Huawei – with a few others (namely Samsung, Cisco, and ZTE) mopping up the remaining crumbs.
Although today's decision is to do with the national 5G network, Dowden said the government is examining the situation as it relates to the national gigabit fibre network, as well as legacy mobile networks.
With respect to fixed-line networks, Dowden announced a technical consultation that would aim to identify possible alternatives and manage existing risks. This period is expected to last no longer than two years.
Both Dowden and Onwurah said a move towards open standards would benefit the market, with the DCMS minister saying of open RAN, which has been pushed by the US government as a way of replacing Huawei kit by getting other vendors to buy into nonproprietary designs that make their equipment interoperable: "There are big barriers to it. But of course, that is the objective we're working towards."
The government will also seek to secure the existing supply chains, while lowering barriers to entry for new vendors and investing in R&D.
Speaking to The Register, telecoms analyst Paolo Pescatore described today's news as "a huge blow" for Huawei, as well as a "major headache" for telcos.
"While, there are other network vendors who could pick up the pieces, it is unclear whether they are up to the task," he said. "Established rivals like Ericsson and Nokia have been struggling and there's a resurgence of players like Samsung Networks and Japanese players Fujitsu, NEC. Smaller, fast growing and niche solution providers like [open RAN kit purveyor] Mavenir will all be keen to secure new business."
He added: "Who will fork out for these additional costs and disruption in any service issues that might arise? Hopefully not the users! Ultimately any additional costs always gets passed onto the user. More so at a time when margins are already squeezed and all players are seeing the economic impact from the pandemic."
BT told The Reg: "We note the government's announcement today relating to the use of Huawei equipment in the UK. The security and resilience of our networks is an absolute priority for BT. While we have prepared for a range of scenarios, we need to further analyse the details and implications of this decision before taking a view of potential costs and impacts."
Gartner's Sylvain Fabre told us: "Generally the costs are one issue, although it can be expected that CSPs will push back for help from government; what really affects the speed of 5G rollout is the lead times for approval for upgrade work on existing sites, and the negotiating time for new sites with landlords etc.
"CSPs also upgrade sites and cities on a need basis – justified by both demand, 4G infrastructure being maxed out, and an ability to monetise. Since the CSPs have until 2027, this is plenty of time for the wireless infrastructure, where even newly installed equipment would be updated within that time frame, and so far only a limited part of the UK has seen 5G upgrades.
"The other non-Chinese vendors do get to split the market share now available, however it is not necessarily going to go to the large incumbent vendors, as operators may want to introduce new vendors in order to maintain supplier diversity. ®