U.K. to Support Nokia and Ericsson in Huawei Phase-Out Plan

(Bloomberg) -- The U.K. said it needs to protect Finland’s Nokia Oyj and Sweden’s Ericsson AB, following its ban of China’s Huawei Technologies Co in British 5G networks.

By excluding Huawei, the U.K. is cutting its number of crucial telecommunications suppliers from three to just two -- so it can’t afford for either of them to also vanish, culture secretary Oliver Dowden told lawmakers on Wednesday.

“The biggest single immediate risk to diversification would be to lose another vendor, so that features very strongly in our considerations and discussions,” Dowden told lawmakers on the Science and Technology Committee. That involves “looking at the underlying capital position of those companies, and seeing whether there are further steps that would have to be taken in respect of that.”

Last week, the government said carriers must remove Huawei’s 5G gear from their networks by the end of 2027, saying U.S. sanctions would make it impossible to guarantee the sustainability or security of the equipment. The ban followed years of White House campaigning for allies to bar the vendor and reversed a U.K. decision in January to allow carriers to use Huawei in a limited capacity.

Task Force

Prime Minister Boris Johnson is set to launch a task force, to be led by a senior industry executive, to “turbo-charge” telecom diversification, Dowden said. Officials are considering candidates for the post now.

The U.K. diversification strategy includes bringing in new entrants to the market for the next generation of wireless communications, and pushing projects to make different companies’ products work together, said Dowden. Further details on the approach will be announced in September, when officials will also introduce a telecommunications security bill to tighten standards and write the Huawei ban into law, he told lawmakers.

“The reality is it would be Samsung or NEC that would be most well-placed to enter the U.K. market, although there are significant challenges around that,” he said, alluding partly to Samsung’s lack of support for older 2G and 3G systems.

Dowden said diversifying with openRAN, which refers to a more competitive ecosystem of wireless technology based on open standards, is a longer-term goal and the first significant deployments are still about five years away.

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