UK is at the behest of the White House over Huawei conundrum

The rationale for US aggression against China has never been fully validated, but that is seemingly irrelevant as its sanctions increasingly push the UK to make an uncomfortable choice.

Few in the UK, who fully understand the telecoms industry, want Huawei to be banned from working with telecoms operators. The Chinese vendor is a UK employer, with its own supply chain, it has solid relationships with the telcos where trials to tweak equipment have been going on for years adding valuable competition to the market and its products are already embedded in networks. Irrelevant as to what the Government leak believes, this ban would extend far beyond 5G network deployment.

Over the course of the weekend, it has been reported UK Government officials are considering new rules which would force telecoms operators to shun Huawei, phasing the vendor out of operations. What is not entirely clear is the timetable; an aggressive removal over a shorter period of time would cost a significant amount of money

The reasoning is not down to security concerns, which the Government and industry believe can be managed, but due to the vendor’s supply chain being potentially compromised thanks to actions from the US Government.

According to the source, plans are being drawn up to phase out Huawei equipment due to the assumed vulnerability of its supply chain, and its ability to ensure UK networks remain resilient. This would not have been a route the UK wanted to take, though it seems its hand might have been forced.

The US-Chinese political conflict, which has been incrementally growing, has taken the decision out of the hands of the UK Government and its telecoms operators. Should Huawei be banned, it is not due to UK probes or proactive decision making, but because US political strategy could compromise the firm’s ability to source components critical for its products.

The UK is currently a bystander as its own fate is dictated to it by the White House.

“In January, I thought the UK had found a reasonable balance in limiting Huawei’s role [to 35% of network equipment inventory] in Britain’s 5G network, while not excluding it entirely,” Sir John Sawers, former-Chief of the Secret Intelligence Service, wrote in an op-ed piece for the Financial Times.

“Huawei equipment was thoroughly checked by a testing facility under the control of UK intelligence services. Huawei’s use of reliable suppliers, such as the Taiwan Semiconductor Manufacturing Company, for crucial components also meant we could assure its supply chain.

“The Trump administration’s motives for trying to destroy Huawei can be debated. But the latest US sanctions, at the end of June and last week, mean that reliable non-Chinese suppliers to Huawei can no longer work with the company. UK intelligence services can therefore no longer provide the needed assurances that Chinese-made equipment is still safe to use in the UK’s telecoms network.”

Sawers is correct; the Telecoms Supply Chain Review decision was a perfectly reasonable one. It is one which took a risk mitigation approach to network deployment and management, understanding there is no such thing as 100% secure, but expanding the competitive landscape for telecoms operators in the UK. It seemingly wasn’t influenced by political posturing, instead understanding the position the UK is currently in, the delicate equation which is competition and the value which Huawei offers telecoms operators.

Should this leak prove to be accurate, it would be a very worrying turn of events.

“We are working closely with our customers to find ways of managing the proposed US restrictions so the UK can maintain its current lead in 5G,” said Huawei VP Victor Zhang. “As ever, we remain open to discussions with the Government.

“We believe it is too early to determine the impact of the proposed restrictions, which are not about security, but about market position. All our world-leading products and solutions use technology and components over which the UK government has strict oversight. Our technology is already extensively used in 5G networks across the country and has helped connect people throughout lockdown.”

Interestingly enough, the source who leaked this information has stated the ban would only impact 5G equipment and there would be no need to implement ‘rip and replace’ initiatives. This is a fundamental misunderstanding of the telecoms industry, as numerous telecoms operators have discussed the importance of backwards compatibility, the need to have 4G and 5G equipment from the same vendor. This would explain why Three UK is replacing Samsung 4G equipment in its network in preparation for Huawei being its 5G supplier.

Although this would certainly be a change of policy for the UK Government, the writing has been on the wall for some time.

In March, rebel Tory politicians led by once-important Iain Duncan Smith pressed the Government to take more aggressive action against Huawei. Minister for Digital Infrastructure Matt Warman suggested there would be a timetable to remove ‘high risk vendors’ from the network, perhaps indicating Huawei’s long-term ambitions in the UK would rely on its ability to remove the ‘high risk’ designation from its operations.

Now, it would appear the ‘high risk’ label is irrelevant; if Huawei’s supply chain is deemed suitably compromised it will be determined a risk for new reasons.

Oliver Dowden, Secretary of State for Culture, Media and Sport, has also suggested there could be a U-turn on the cards. This should be seen as a very worrying chain of events for the telecoms industry and the UK on the whole.

For the telecoms industry, this could mean spending some serious cash. Not only would there have to be equipment replaced in the network, but it would mean renegotiating commercial 5G contracts from a weakened position. Being forced into a corner like this will have salespeople at the likes of Ericsson and Nokia wide-eyed in anticipation; blood will have been drawn and the predatory salesperson will be chomping at the bit.

From a political perspective, such a decision will also show the White House that if it huffs and puffs, thumping its chest hard enough and loud enough, it can materially impact political policy in sovereign nations. This was always assumed to be the case, but the UK and other European nations have resisted Oval Office temper tantrums to date. If the UK cracks under the pressure, the wind is thrust in the US’ political sails; expect a much more imposing White House in the future.