Tough UK limits on Huawei's role in 5G threaten telco plans

The Johnson government has imposed tough restrictions on the Chinese vendor that could force BT and Three into expensive and drawn-out swaps.

Iain Morris, International Editor

January 28, 2020

6 Min Read
Tough UK limits on Huawei's role in 5G threaten telco plans

The UK has imposed tough new restrictions on how much 5G equipment Huawei can supply to the country's network operators that stop short of a full ban but may force telcos to rip out equipment provided by the controversial Chinese vendor.

In a long-awaited decision that is unlikely to satisfy anyone, the Conservative government has decided to ban Huawei from the "sensitive" core network parts of a 5G network architecture and other "gigabit-capable" networks. Perhaps more dramatically, it has also capped Huawei's participation in other areas at just 35% -- a figure that may force BT and Three, two of the country's four nationwide operators, to replace existing equipment.

Huawei is subject to these restrictions because it continues to be regarded as a "high risk vendor", or HRV, by the UK authorities.

The authorities have also said the 35% cap "will be kept under review to determine whether it should be further reduced as the market diversifies."

The statement from the Department of Culture, Media and Sport (DCMS) does not specifically name Huawei, instead referring to "high-risk vendors." But the UK's National Cyber Security Centre (NCSC) has issued an accompanying statement that says: "Huawei has always been considered higher risk by the UK government."

It also attempts to clarify how the 35% cap will be measured. In the case of 5G access networks, Huawei will not be allowed to provide equipment at more than 35% of basestation sites nationally across a particular network, or to carry more than 35% of total network traffic volumes.

When it comes to full-fiber and other gigabit-capable networks, the Chinese vendor will be stopped from supplying equipment to more than 35% of the UK premises covered.

For any other functions in these networks, Huawei will not be able to provide more than 35% of network elements from a particular class of equipment, the NCSC goes on to say.

The understanding is that these caps need to be hit within three years, but when that clock starts appears to be unclear to everyone involved. Further clarifications from the DCMS and NCSC will help. Currently the DCMS documentation says that: "From a cyber security perspective, the NCSC advises operators whose Huawei estates currently exceed the recommended level for an HRV, to reduce to the recommended level as soon as practical. We understand that this takes time, but consider that it should be possible for all operators to reduce their use of HRVs to the recommended levels within 3 years."

Today's decision follows months of wrangling over Huawei's role in the UK's telecom network, with US authorities pushing hard for a ban on grounds of national security.

Critics have stuck to the line that products made by Huawei and ZTE, a smaller Chinese vendor, could feature "backdoors" for Chinese spies and saboteurs, charges Huawei has repeatedly denied.

BT, Three and Vodafone, all of which are heavily reliant on Huawei's equipment, have sought to alleviate the security concerns by excluding Chinese vendors from their core networks. BT is the only network operator with a Huawei core, having acquired that in 2016 with its takeover of the EE mobile business. It is now shifting to other suppliers to align EE with internal company rules.

US authorities, however, have drawn no distinction between the radio and core, arguing those lines blur in 5G networks because intelligent functions can be hosted in the access part of the network. Ericsson, a Huawei rival that is likely to benefit from today's ruling, has similarly argued that distinguishing between core and access is much harder in 5G networks.

Boris Johnson, the UK's prime minister, appears to have taken heed, imposing access network restrictions and a timeline for compliance that are much tougher than service providers are understood to have been expecting.

Operators have previously said any restrictions in the 5G access network would force them to replace older 4G equipment -- at considerable cost -- arguing the use of different suppliers could lead to interoperability problems.

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The concern now is that BT and Three will have to carry out expensive "swaps" to comply with the government's latest guidelines, slowing down the rollout of new 5G networks.

BT's radio access network (RAN) is currently split between Huawei and Nokia. Three has previously relied on a mixture of Nokia, Samsung and Huawei but aims to phase out Samsung as it upgrades to a 5G network built entirely by Huawei. It may now have to revisit those plans. "We note the government's announcement and are reviewing the detail," said Three CEO Dave Dyson in a statement.

Vodafone and Telefónica-owned O2 are likely to be less affected by the government's move: Vodafone counts Ericsson as its main RAN vendor, while O2 appears to have used Ericsson and Nokia so far.

Despite the tough measures, the UK risks upsetting the US by refusing to impose a blanket ban on Chinese suppliers. US officials have previously threatened to stop sharing intelligence with the UK if it continues to let Huawei supply technology used in its 5G networks. A post-Brexit trade agreement between the UK and the US could also be at risk.

The move could anger the Chinese, too, and comes weeks after Liu Xiaoming, China's ambassador to the UK, warned in a tweet that any ban would affect "the confidence of foreign investors and the cooperation between China and the UK."

John Strand, an outspoken critic of Huawei and the CEO of the Stand Consult advisory group, described the policy as a "step in the right direction."

"It also means that UK operators will have to prioritize network upgrades in the Western part of the country where Huawei equipment is largely deployed," he said. "In practical terms, it will not be possible for an operator to use Huawei for more than 35% of the equipment and then use another Chinese or Huawei-white-labeled product for the rest of the network, or a portion thereof."

Other European countries that have also been under US pressure to ban Huawei will be watching closely to see how the UK's service providers and the US government respond to the latest measures.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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