New US sanctions could significantly impact the 5G infrastructure plans that Huawei and the UK agreed to earlier this year.

At the beginning of the year, the UK gave Huawei the green light to provide 5G network infrastructure, while subjecting the Chinese telecoms business to strict limits.

A few months later, it appears that the UK could be set to make a U-turn on this decision. On Friday (22 May), the Guardian reported that Boris Johnson has caved to Conservative pressure, calling for a reduction in Huawei’s role in the UK’s 5G networks.

Johnson has begun to draw up plans to reduce Huawei’s involvement to zero by 2023. The Guardian suggested that this decision was made to avoid defeat when Johnson’s proposal to reduce Huawei to a 35pc market share was set to be voted on in the House of Commons.

A change of plan

Much of the concern around Huawei’s involvement in the UK’s 5G infrastructure relates to fears of mass surveillance, echoing the sentiment against the Chinese company in the US government.

However, British intelligence agencies supported the bill that gave Huawei the go-ahead in January, arguing that they could contain any risks of mass surveillance through Huawei equipment.

In recent weeks, the US has increased sanctions on Huawei, with an amendment that prevents manufacturers of semiconductors using American technology in their operations from shipping their products to Huawei unless they get a licence from the US.

Because of these new sanctions, an emergency review of the deal the UK made with Huawei in January was called, with the National Cyber Security Centre (NCSC) in the UK brought into discussions around the Chinese company’s future in the UK.

Security concerns

The UK believes that when the US sanctions are introduced in September, Huawei will be forced to use semiconductors and 5G equipment from alternative sources in China, now that the US will no longer sell hardware to the company.

The UK is now concerned that Huawei will become reliant on “unfamiliar and untested components,” which could be exploited. Huawei vice-president Victor Zhang has said that the company is happy to discuss concerns that the UK has.

According to the Guardian, the NCSC is expected to conclude that the latest sanctions will make it impossible for Huawei’s technology to be used in UK 5G networks. The publication said that the move risks “irritating China” and adding hundreds of millions in costs to BT and other phone companies.

A spokesperson for the NCSC told the BBC: “The security and resilience of our networks is of paramount importance. Following the US announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have to the UK’s networks.”

What could happen?

Huawei has said that the latest sanctions imposed on the company the US will damage the trust and collaboration within the global semiconductor industry. If the UK cuts Huawei out of its 5G infrastructure plan as a result of the sanctions, it’s likely that these feelings will intensify for the Chinese company.

Huawei’s rotating chairman Guo Ping recently admitted the toll that the sanctions have had on the company, stating that while it is able to design some semiconductor parts, it is “incapable of doing a lot of other things.” Ping said: “Survival is the keyword for us at present.”

For the UK, the consequences of a decision to completely remove Huawei from its infrastructure plans could affect how quickly internet access is rolled out and how much it will cost, the BBC explained.

The move may ease tensions between the UK and the US, but Huawei warned that it would be bad for competition. Huawei has just two major competitors in the UK in this space, which are Nokia and Ericsson. The Chinese company said that having three providers helps to negotiate lower prices.

Zhang told the BBC: “More suppliers means greater competition, innovation and network reliability and crucially ensures consumers have access to the best possible technology. Removing Huawei would seriously delay 5G, costing the British economy up to £7bn.”

An impact on broadband

Huawei also plays a significant role in the UK’s fixed-line broadband infrastructure, accounting for 44pc of the equipment used in providing full-fibre connections to homes, offices and other buildings, according to Ofcom.

BT wants to reduce that figure to 35pc, to meet a government target, by introducing more technology from Nokia and Adtran. However, tens of thousands of fibre broadband roadside cabinets in the UK belong to Huawei.

Andrew Ferguson, editor-in-chief of ThinkBroadband told the BBC: “They connect directly to the core of the network, but replacing those is a complete non-starter unless someone’s going to throw many billions of pounds at it and also all the people to do the work.”

While opponents of Huawei want to see the company’s equipment reduced in broadband infrastructure, they have accepted that it is “impractical in the short term”.

Commenting on the situation , Zhang said: “As a private company, 100pc owned by employees, which has operated in the UK for 20 years, our priority has been to help mobile and broadband companies keep Britain connected, which in this current health crisis has been more vital than ever.”