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Huawei Woos U.K. Establishment Allies as Ban Fears Still Loom

Phone carriers have already started to deploy its 5G antennas in the U.K.

Huawei Woos U.K. Establishment Allies as Ban Fears Still Loom
An employee stands next to a reception desk of a Huawei Technologies Co. mobile phone plant in Dongguan, China. (Photographer: Qilai Shen/Bloomberg)

(Bloomberg) -- Huawei Technologies Co. throws a glitzy drinks reception in London every June. Last year, it had just been crowned the world’s biggest telecom equipment maker and the British trade commissioner for China praised strong ties between two countries in a speech.

That party might have been a high water mark. This year, the Chinese tech giant was on the defensive after a U.S. campaign to block it from 5G networks. At Tuesday evening’s event -- held at the 400-year-old palace where King Charles I was beheaded -- Huawei and its supporters made their case for why the company should remain in Britain at all.

David Willetts, a former minister who oversaw the U.K.’s relationship with Huawei during his time in government from 2010 to 2014, warned a blanket ban in the country would come at too high a cost. “It would put globalization into reverse,” he said, and “would mean a post-Brexit Britain was not global at all, because we would only trade on American terms.”

This followed a speech from John Browne, chairman of Huawei’s U.K. board and BP Plc’s former chief executive officer. He sits on that board alongside Andrew Cahn, a former senior civil servant, who was also there mingling with Barclays Bank Plc Chairman Gerry Grimstone and Mike Rake, former chairman of BT Group Plc, a key Huawei customer.

The reception was also attended by representatives of Huawei’s biggest British clients, including mobile operators BT and Vodafone Group Plc, as well as an array of senior politicians, including Vince Cable, the leader of the Liberal Democrats, the U.K.’s fourth-largest party.

Economic Contribution

Screens dotted throughout the venue trumpeted Huawei’s contribution to U.K. gross domestic product, which it put at 1.7 billion pounds ($2.16 billion) in 2018, as well as tax revenues of 470 million pounds last year and its support of 26,000 jobs, to help sway any politicians on the fence.

Britain’s decision on Huawei, part of a telecom sector review examining security considerations, has been delayed by an imminent change in prime minister and the U.S. decision to ban its companies from supplying Huawei.

President Donald Trump, who’s pulled Huawei into the country’s trade war with China, has argued that Huawei’s connections with the Chinese government mean it could allow Beijing to spy through its equipment, which the company denies.

U.K. officials are evaluating whether the export ban would pose economic risks to Britain’s telecom supplies, according to a senior member of the British government, who asked not to be identified as the deliberations are private.

It’s unclear how Boris Johnson and Jeremy Hunt, who are vying for Tory leadership to replace Theresa May, would approach the matter. A leak in April showed May was set to green light Huawei’s role in non-core network applications.

In the U.K., one of the company’s most important markets outside China, phone carriers have already started to deploy its 5G antennas; BT launched its 5G network in six cities using the Chinese supplier’s equipment last month, and Vodafone is set to follow suit on July 3.

In an emailed statement, former Business Secretary Cable said “the government should not allow itself to be browbeaten by the Trump administration,” and argued that the U.K. should stick with the “perfectly sensible compromise on 5G” that it had appeared to be pursuing before the leak.

“I dealt extensively with Huawei as Secretary of State, and had no reason for complaint about their performance or behavior,” Cable said.

To contact the reporters on this story: Thomas Seal in London at tseal@bloomberg.net;Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, ;Tim Ross at tross54@bloomberg.net, Giles Turner

©2019 Bloomberg L.P.