This article is more than 1 year old

Trump gloats, telcos weep, and China is furious: How things stand following UK's decision to rip out Huawei

'Retaliation should be public and painful' says Beijing-approved rag

The ink has scarcely dried on the Secretary of State for Culture, Media and Sport's speech to the House of Commons that confirmed Huawei would be banned from the UK.

The landmark ruling has drastic consequences for the Chinese comms giant. Its second-biggest business unit is carriers, and Huawei has long been involved with the UK market, having recorded its 20th anniversary earlier this year. But the decision also has major ramifications for telcos, as well as for transatlantic and Sino-British relations.

Yo, Johnson!

As Huawei has evolved into America's foremost technological foe, lawmakers from both sides of the partisan aisle have heaped pressure on international allies in an attempt to further isolate the firm.

In March, a cross-party group of senators issued an open letter urging the UK to reconsider the decision to allow Huawei a limited involvement in the national 5G network. This is notable, considering the fractious nature of US politics, and that one-fifth of the 100-member Senate signed on to the letter.

This pressure has also come from the highest echelon in US politics, with President Donald Trump using the 2019 G7 meeting in France to pressure Prime Minister Boris Johnson to ban Huawei.

It would have been prudent for the US to take a more measured approach. One of the major arguments for the UK leaving the EU was, after all, sovereignty. Being too heavy-handed would prompt many to assume the UK had resumed the "poodle" role it occupied during the Bush-Blair years, with Britain an inferior partner in the transatlantic "special relationship".

If self awareness of those concerns ever existed in Washington, they've clearly gone out the window since the announcement of the ban, with Trump telling reporters at a news conference in the White House Rose Garden yesterday: "I did this myself."

"I talked many countries out of using it. If they want to do business with us, they can't use it. Just today, I believe the UK announced they're not going to be using it."

In short: Trump did everything except ask "who's a good boy?" and hand Johnson a Schmacko.

China crisis

Trump's remarks have gone down poorly in China, with Beijing arguing they illustrate the concerns surrounding Huawei were never grounded in technology, but rather geopolitics.

That argument was echoed by Huawei's UK director of communications, Ed Brewster, who told the BBC's Newsnight the government's decision was "not about security; this is about trade."

The starkest words came from the China state-run Global Times. In an editorial, the English-language daily said it was "necessary" for China to retaliate against the UK, "otherwise wouldn't we be too easy to bully?"

"Such retaliation should be public and painful for the UK," it added.

While that isn't from an official government source, it's worth acknowledging, given the highly controlled nature of the Chinese media. The US government doubts the editorial independence of Global Times, with the State Department declaring the tabloid a "foreign mission" last month – putting it in the same category as embassies and consulates.

Misery for telcos

In his speech to the Commons yesterday, culture secretary Oliver Dowden warned that the decision to ban Huawei would have a financial cost for the UK's network operators and further delay the nationwide rollout of 5G.

"Today's decision to ban the procurement of new Huawei 5G equipment from the end of this year will delay that rollout by a further year and will add up to £500m to costs," he said.

"In addition, requiring operators to remove Huawei equipment from their 5G networks by 2027 will add further hundreds of millions of pounds to the cost and will further delay the rollout. That means a cumulative delay to 5G rollout of two to three years, and costs of up to £2bn. That will have real consequences for the connections on which all our constituents rely."

The impact to carriers will vary. O2, for example, isn't exposed as it relies on Ericsson and Nokia. Others aren't so lucky.

BT is adamant it can comply with the new rules without exceeding the initial £500m it earmarked for reducing its Huawei footprint to just 35 per cent of non-core networking equipment.

We also asked Three and Vodafone about the costs they're likely to incur, and what delays customers can expect.

A Three spokesperson said the telco has pledged to "comply fully with the government's decision" and is "working through the National Cyber Security Centre guidance to understand what it means for our network plans." Three has chosen Nokia to be its core network provider, with Huawei's RAN kit present on less than 25 per cent of its total network sites.

Still, analysts expect a measurable impact. PP Foresight's Paolo Pescatore argued that any effects of the Huawei ban will be keenly felt given the tech's infancy. "The business model for 5G remains unproven," he said. "Telcos are wary, given the need to balance the cost of investment while margins are being squeezed."

What next?

The future is uncertain for Huawei, and many questions remain unanswered. What, for example, will happen to the Huawei Cyber Security Evaluation Centre (HCSEC) – also known as "The Cell".

This facility – paid for by Huawei and largely staffed by its own employees – allows the Government Communications Headquarters (GCHQ) to take a deep dive into the firm's networking kit. But with Huawei excluded from the UK 5G market, there's not the same level of need to offer that transparency to GCHQ's techies, nor commit the resources to operating it.

Similarly, what about legacy networks, as well as the UK's gigabit fibre network? Dowden has promised to "take a different approach" here, focusing on market solutions. This will include a technical review to look at the market and the supply chain, with an aim of diversification. But concrete specifics – and expected outcomes – are nowhere to be found.

With Huawei isolated from networks across Europe, North America, and Australasia, can we expect to see a more isolated company, focused primarily on its traditional Mainland China heartland? Or will it continue to be an outward-looking firm – an ambassador for China's broader technological ambitions?

Watch this space. ®

More about

More about

More about

TIP US OFF

Send us news


Other stories you might like