U.K. Ministers Weigh Decision to Give Huawei Role in 5G Networks
U.K. Ministers Weigh Decision to Give Huawei Role in 5G Networks
(Bloomberg) -- The U.K. government is poised to allow Huawei Technologies Co. a role in developing the country’s fifth-generation wireless broadband networks, as Boris Johnson prepares to reject U.S. President Donald Trump’s call to ban the Chinese firm on security grounds.
The decision, which British ministers are expected to take in the coming days, is likely to be announced in Parliament next week, according to a person familiar with the matter who spoke on condition of anonymity.
The Trump administration has lobbied Johnson’s government hard in recent weeks to try to persuade the U.K. to exclude Huawei from 5G networks over concerns the technology could facilitate Chinese spying in future. The company has always denied that it poses any security risk.
A final decision hasn’t been taken yet, and Johnson’s team will be examining all the options in the coming days.
Long History
But several key issues are weighing in favor of allowing Huawei to take a role in the less sensitive elements of the emerging 5G networks -- though not in the most security critical “core.” First, the company has had a presence in British telecommunications infrastructure for about 15 years, and officials have managed it in a secure way, the person said.
The 5G networks will build on these existing structures, so wireless networks can cope with soaring data traffic and enable connected cars and factories.
The history is different in the U.S., which does not have Huawei equipment embedded in its networks, the person said.
The cost to telecommunications companies of excluding Huawei would run to billions of pounds, while the loss of the most effective fixed equipment would set back Johnson’s timetable for rolling out full fiber broadband by four years, the person said.
No Alternatives
Crucially, no other company can provide the same quality of product that Huawei does for U.K.-based providers, the person said. Johnson’s officials asked their U.S. counterparts this month whether any alternative products were being developed by American companies, or anyone else, and were met with a shake of the head.
While European equipment makers Nokia Oyj and Ericsson AB compete directly with Huawei on 5G mobile gear and have won contracts alongside the Shenzhen-based firm, there are no other major companies capable of stepping in to maintain the three-player market, should Huawei be barred. That’s hindered U.S. efforts to persuade allies to fully block the Chinese company.
That market failure needs to be rectified, the person said, but won’t happen in time to affect the decision on Huawei, which needs to be taken now.
To contact the reporters on this story: Tim Ross in London at tross54@bloomberg.net;Jessica Shankleman in London at jshankleman@bloomberg.net
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Stuart Biggs, Mark Williams
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