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Security Questions Cloud Huawei’s Role in Private 5G Networks

Security Questions Cloud Huawei’s Role in Private 5G Networks

(Bloomberg Businessweek) -- More than a year ago, the U.S. asked its allies to ban equipment manufactured by China’s Huawei Technologies Co. because of American concerns about the company’s ties to the Chinese Communist Party. But European governments are still pushing back, saying there’s a safe way to work with the world’s biggest communications equipment supplier.

Italy and Germany are reinforcing security testing and approvals for new equipment to allay fears that Beijing could use Huawei systems for intellectual-property theft, spying, or sabotage. But neither country has banned Huawei gear, nor has France. And the U.K. has taken a different tack, effectively capping the Shenzhen-based vendor’s market share and excluding it from the most sensitive parts of its national mobile networks.

No one, however, has yet figured out what to do about Huawei’s role in the patchwork of smaller private communication networks that underpin everything from oilfields and airports to sea terminals and municipal governments, or how best to protect critical operations run over national networks. Britain’s emergency services network, run by BT Group Plc, is set to rely on antennas from Huawei, as well as those from Finland’s Nokia Oyj, to connect police, health, and fire services.

Security Questions Cloud Huawei’s Role in Private 5G Networks

Many owners of these sites and services want to keep Huawei—which has consistently denied its equipment poses a security risk—as a supplier when they upgrade to 5G, the next generation of wireless communications. But a lack of concrete guidance has left them wondering whether they’ll need to rip out Huawei equipment later if they move ahead. “There are a series of subnetworks in this country which are clearly critical, but which I’m not sure we have treated with the seriousness that they deserve,” says Bob Seely, one of a group of lawmakers from the U.K.’s governing Conservative Party who are trying to persuade Prime Minister Boris Johnson to exclude Huawei from 5G. “It seems to me common sense that you would not have a high-risk vendor in a critical emergency services network.”

Yet for the bulk of its wireless networks, Europe’s only practicable alternatives to Huawei are Sweden’s Ericsson AB and Nokia. So removing the Chinese company—the biggest player in the market—could create a potentially dangerous duopoly. A decade-long research and marketing effort has made Huawei the region’s most critical provider of antennas, switches, fiber optics, and network splicing systems. Deutsche Telekom AG officials have warned that banning Huawei from 5G could delay network rollouts by at least two years. Europe already lags China, South Korea, and the U.S. in 5G investment, after leading the way with some earlier mobile technologies.

A “toolbox” published by the European Union to help member states deal with security risks in 5G networks highlights the wireless technology’s increased importance in infrastructure, but it defers policymaking to individual nations. U.K. official guidelines published in January say “high-risk” suppliers (a term the government has used to describe Huawei and Chinese rival ZTE Corp.) should be excluded from “safety related and safety critical networks in critical national infrastructure.”

Nonetheless, Huawei’s gear is already deeply entrenched in communications systems across the U.K. The company helped set up IT infrastructure for a National Health Service division in Wiltshire. Its antennas are used to control trucks and cranes taking containers off ships at Britain’s largest container port at Felixstowe. And Heathrow Airport in London, Europe’s busiest, uses Huawei gear to emit and receive controls for such vehicles as trucks and snowplows, as well as for its communications.

Security Questions Cloud Huawei’s Role in Private 5G Networks

Huawei equipment is equally ubiquitous on the Continent. The company won a big contract to provide communications for offshore drilling platforms and tankers in Norway’s oilfields. Its client is Tampnet AS, which leases broadband services to oil giants such as the U.K.-Dutch energy company Royal Dutch Shell Plc. Huawei’s “Smart City” IT infrastructure underpins municipal and emergency services systems in the Madrid suburb of Rivas-Vaciamadrid, including surveillance, lighting, and building entry.

That established footprint has positioned Huawei to be a major player in 5G as companies worldwide are set to unlock as much as $4.3 trillion in value from 5G enterprise networks in coming years, according to KPMG. And the Chinese company is jostling aggressively with Nokia and Ericsson to supply gear in systems that promise to do everything from inspecting jet engines in virtual reality to monitoring the vital signs of thousands of medical patients in real time.

“For the companies making these huge capital investments, the obvious choice is Huawei, given their flexibility and their highly competitive pricing,” says Ben Wood, an analyst at CCS Insight. “Should it emerge that they can’t use Huawei infrastructure, that may well set back some of these initiatives in places like ports and airports.” That’s because Huawei—known more for its smartphones—has spent a decade seeking an edge in industrial networks that can ping data among vehicles, robots, sensors, and cameras at lightning speed, driving efficiency gains and new applications such as smart factories and driverless cars. For one potential customer, German engineering giant Robert Bosch, a blanket ban on one supplier could push up the cost of private networks and slow progress toward industrial 5G, says company spokeswoman Rianne Ojeh.

Meanwhile, Britain’s hazy guidance about “high-risk” suppliers has prolonged confusion among operators of private communication systems. Three UK, the unit of CK Hutchison Holdings Co. that runs the Felixstowe and Heathrow networks, doesn’t know what role Huawei will be allowed to play in its future system infrastructure, says Dave Dyson, until recently the division’s chief executive officer. Huawei’s use in private networks is “one of the outstanding questions that we’ve still got,” he says. A company spokeswoman adds: “Further conversations with Britain’s National Cyber Security Centre have provided more clarity, and conversations are ongoing.” —With Helene Fouquet, Kitty Donaldson, and Patrick Donahue
 
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