UK draws up 3-year plan to remove Huawei from 5G networks

Downing Street under pressure after allowing Chinese telecoms group a limited role. Photo / Getty Images

The UK government is drawing up plans to force a full phase out of Huawei from Britain's 5G networks within three years, officials have confirmed.

Downing Street has been under pressure from Tory MPs to ensure that the UK's telecoms networks — including 5G mobile phone infrastructure — do not contain equipment from the Chinese company beyond 2023 because they believe this could compromise national security.

Boris Johnson, prime minister, in January granted the Chinese telecoms equipment maker a limited role in supplying kit for the UK's 5G networks, while capping Huawei's market share to 35 per cent. The rules also banned the use of the company's equipment in the critical core of mobile networks where data is stored and routed.

In March the government only narrowly defeated a Tory rebel amendment designed to ban Huawei from UK networks completely.

Now the prime minister has instructed officials to tighten restrictions on the involvement of the company in the new system to zero by 2023, according to a report in the Daily Telegraph, which officials have confirmed. The newspaper reported that Mr Johnson always had "serious concerns" about the 5G agreement, initially brokered by his predecessor Theresa May, and now wanted it to be "significantly scaled back".

One official said that circumstances had changed in recent months: "The landscape is different and it's right that we re-examine this immediately."

Mr Johnson is under pressure from Tory MPs to reset relations with Beijing after the coronavirus pandemic, amid accusations that the Chinese government did not disclose the initial scale of the problem.

Donald Trump, the US president, made clear his displeasure at Mr Johnson's decision to press ahead with the Huawei deal — albeit in a scaled-back form — in January. Mr Trump threatened to restrict the UK's access to the Five Eyes intelligence system.

EE, Vodafone and Three use Huawei equipment in their 5G networks.

Switching to a rival supplier — such as Ericsson or Nokia — would slow down the roll out and add costs for companies that need to replace Huawei equipment. BT has estimated that the cost of complying with the 35 per cent cap would be £500m.

Telecoms executives are frustrated that, despite an 18-month review and the imposition of limits on the use of Huawei equipment, the issue is still being debated politically. One said that a 2023 timeline was "too aggressive" for a full phase out, and raised the issue of how such a switch would be paid for.

Victor Zhang, of Huawei, said: "We've seen the reports from unnamed sources which simply don't make sense. The government decided in January to approve our part in the 5G rollout, because Britain needs the best possible technologies, more choice, innovation and more suppliers, all of which means more secure and more resilient networks."

The telecoms industry has warned that a full ban on Huawei equipment would undermine the prime minister's election pledge to deliver superfast broadband to the entire country by 2025.

Mr Johnson signalled last week that he would accelerate long-expected legislation to expand the number of foreign deals that are examined by the takeover authorities. He is also stepping up plans to make the UK more self-sufficient in products such as personal protective equipment, many of which are currently sourced from China.

Tory MPs have been planning a renewed guerrilla strike against the government's Huawei policy this summer.

David Davis, the former home secretary, said the rebels would try in the coming weeks to block Huawei if the government did not do so itself.

"The Huawei policy may have been arguable pre-corona but I don't think it is any more, that may not be rational but the zeitgeist has changed," he said.

Written by: Jim Pickard and Nic Fildes

© Financial Times 2020