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Huawei Faces Ban on Selling 5G Kit to U.K. by End of This Year

Bloomberg logo Bloomberg 7/14/2020 Kitty Donaldson
a large building: An array of 5G masts including Huawei Technologies Co. 5G equipment, bottom right, installed on a rooftop overlooking St. Paul's Cathedral by EE the wireless network provider, owned by BT Group Plc, during trials in the City of London, U.K., on Friday, March 15, 2019. Europe would fall behind the U.S. and China in the race to install the next generation of wireless networks if governments ban Chinese equipment supplier Huawei Technologies Co. over security fears, according to an internal assessment by Deutsche Telekom AG. © Photographer: Simon Dawson/Bloomberg An array of 5G masts including Huawei Technologies Co. 5G equipment, bottom right, installed on a rooftop overlooking St. Paul's Cathedral by EE the wireless network provider, owned by BT Group Plc, during trials in the City of London, U.K., on Friday, March 15, 2019. Europe would fall behind the U.S. and China in the race to install the next generation of wireless networks if governments ban Chinese equipment supplier Huawei Technologies Co. over security fears, according to an internal assessment by Deutsche Telekom AG.

(Bloomberg) -- The U.K. is poised to ban Huawei Technologies Co. from its next generation mobile networks under a two-step plan to protect critical systems from security threats, a person familiar with the matter said.

Under the blueprint, British phone companies will not be able to add any new Huawei components to their 5G networks by the end of the year. After that, all existing equipment made by the Shenzhen-based company would need to be removed from 5G infrastructure by 2027, the person said, speaking anonymously to discuss sensitive plans.

Prime Minister Boris Johnson, his senior ministers and top security chiefs are due to be presented with the proposal at a meeting of the National Security Council on Tuesday. A decision is expected to be announced later in the House of Commons.

If the plan is agreed to at that meeting, it would mark a major reversal by Johnson, and risk escalating tensions between the U.K. and China at a highly sensitive time. China has warned Johnson will face “consequences” if the U.K. treats it as a “hostile partner.”

U.K. Does a U-Turn on China, Forced Into an Uneven Fight

Johnson gave the green light to Huawei’s involvement in emerging mobile networks in January, subject to limits, but he came under intense pressure from U.S. President Donald Trump to change course.

In May the U.S. banned Huawei from sourcing microchips which use American technology, a move that forced British officials to reassess their view of the security and sustainability of using the company’s equipment in 5G networks.

The U.K.’s National Cyber Security Centre led a review which concluded the new U.S. sanctions meant Huawei would have to use potentially insecure technology, making 5G security risks impossible to control.

At the same time, Johnson has faced demands from within his own Conservative Party to take a tougher line with Beijing. Senior Tories demanded the premier should give firm deadlines for when Huawei will be blocked from Britain, amid concerns its equipment could be used by Chinese spies -- a charge the company denies.

U.S. War on Huawei Begins to Turn After Europe’s Rough Year

The premier’s officials have been working on a plan to phase out Huawei equipment from 5G networks and diversify the market by bringing in other providers. The key question now is the time-frame for action. Tory opponents of Huawei want its kit to be removed from 5G infrastructure as soon as possible but phone companies have warned this will be difficult and expensive.

U.K. Carriers’ High-Cost Estimates on Huawei Ban Raise Doubts

Johnson now faces several difficulties. Huawei is a huge global phone equipment maker which is already embedded in British networks. Removing it will be complicated for phone companies and risks undermining the premier’s election promise to improve communications services across the U.K.

In the short term, a ban on the company will inflame already heated relations between London and Beijing. Tensions have grown recently over China’s new security law in Hong Kong, a former British colony, and the handling of the coronavirus pandemic.

Last week Liu Xiaoming, China’s ambassador to the U.K., accused Johnson’s government of “gross interference” in domestic policy and accused the U.K. of “dancing to the tune” of the U.S. over Huawei.

Even in London, the prime minister may find his plans do not go far enough to satisfy some of his Conservative colleagues.

“We’re delighted the government has listened to us and will start stripping Huawei out right now,” Conservative member of Parliament Bob Seely said in an interview. “However, there are a number of colleagues who may seek to amend the 2027 date,” he added. “They may use the government’s 2027 date as a starting point to remove Huawei entirely from the networks and seek to make it sooner.”

(Updates with context in paragraph nine)

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