UK sets limits on Huawei


Huawei can supply 5G radio kit to the UK's mobile operators, but not for the core - and there are strict limits. By Alan Burkitt-Gray.

K mobile operators will be able to use Huawei equipment in their new 5G networks, but only in limited parts of their infrastructure, and only to a fixed maximum percentage, because it is a “high-risk vendor”, according to the British government.

The decision will be expensive. Vodafone’s group CEO Nick Read said the company will remove Huawei technology from its core network at a cost of approximately €200 million. “This will take around five years to implement,” he said.

BT warned that it will cost £500 million – also over five years – to remove Huawei equipment from parts of its network under the UK government’s decision to limit the vendor’s role in telecoms infrastructure. BT, which owns mobile operator EE, said it would remove some Huawei kit from 5G and fibre networks to get to the UK government’s target of 35% from the Chinese vendor.

This will be backed by legislation, said Nicky Morgan, in one of her last moves as minister for Digital, Culture, Media and Sport. “The Government intends to legislate, at the earliest opportunity, to introduce a new comprehensive telecoms security regime – to be overseen by the communications sector regulator, Ofcom, and Government.”

Meanwhile, Orange announced that it was using Ericsson and Nokia for its 5G infrastructure. Orange made no reference to Huawei in its announcement, but that silence was telling.

Nokia will focus on the west and south-east regions of France in areas where the company already supplies 2G, 3G and 4G for the radio access network (RAN). Ericsson will focus on the Île de France – the area around Paris – plus the north-east and south-west regions, where it already supplies 2G, 3G and 4G on the RAN.

In her statement, Morgan said the UK would attract “established vendors who are not currently present in the UK”, and would support “the emergence of new, disruptive entrants to the supply chain”, as well as promote “the adoption of open, interoperable standards that will reduce barriers to entry”.

In the UK parliament, a few hours after the ministerial statements, politicians expressed their puzzlement that there are only three companies in the world that can build complex 5G networks. There are no UK-based vendors and introducing a new one is a project that might succeed in time for 6G. Open standards, as supported by Morgan, are certainly one way to go. The O-RAN Alliance supports just this sort of move, though – as the name implies – it focuses on the radio network. It’s not the perfect answer for Sinophobes, nevertheless: ZTE and software company AsiaInfo and other Chinese vendors, as well as China Mobile, are all members of O-RAN, though Huawei is not.

That’s at the edge; what about the core? There you have the Open Networking Automation Platform (ONAP), which shelters under the wing of the Linux Foundation and brings together AT&T, China Mobile, Huawei and ZTE.

The trouble with “open, interoperable standards” is that they’re open and all sorts of companies can follow.

But back to Parliament in London. How was it allowed to happen, honourable members wondered, that critical national infrastructure should be in the hands of so few companies, with no UK and no US firms on the list?

The story is simple. From the 1990s onwards there has been a continuous process of consolidation, company by company. In the US, ITT moved out, Motorola split and moved out and Nortel disappeared in financial difficulties, while Lucent – formerly the manufacturing arm of AT&T – merged with Alcatel of France.

In mainland Europe, Siemens sold its telecoms business to Nokia, which then bought Alcatel-Lucent. In the UK, GEC merged with Plessey and renamed itself Marconi, and after it almost collapsed was taken over by Ericsson.

There are other names, particularly from Europe, that have vanished or moved out of telecoms: Bell (of Belgium), Bosch, Philips, Pye, Racal and Thomson CSF, for example. ITT of the US owned SEL of Germany and STC of the UK – in whose lab Charles Kao invented optical fibres – as well as SESA of Spain and Standard Telefon in Norway.

Each of these disappeared in what was at the time judged to be a well-argued acquisition or an uncomfortable exit.

But that’s left us with a market dominated by three companies, Ericsson, Huawei and Nokia, with vendors such as NEC of Japan and Samsung of South Korea having smaller market shares.

US Attorney General William Barr has proposed a bizarre solution to at least part of the problem. He said: “These concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”

No way, said Cisco, one of the most likely US candidates. And that would pose a challenge for China, as both European companies have significant market share in the Chinese mobile market. Barr’s idea is likely to die a quiet death, but that doesn’t solve the overall problem.

Huawei vice president Victor Zhang, who runs the Chinese company’s UK office, said after Morgan’s statement:

“Huawei is reassured by the UK government’s confirmation that we can continue working with our customers to keep the 5G roll-out on track. This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market.”

Politicians were also asking how Huawei had been allowed to reach such a dominant position in the global market. Because, most operators across Europe were saying until a couple of years ago, Huawei’s kit was good and its engineers were responsive. Call your account manager at Huawei on a Friday morning with a problem, people said, and a planeload of specialists would be there by Monday to sort it out.

Four years ago, Deutsche Telekom was boasting of a 4G speed record of 1.2Gbps that it had achieved in Berlin using Huawei equipment. “We are ahead of our time and ahead of the competition,” said Claudia Nemat, then Deutsche Telekom’s board member for Europe and technology (now she is head of technology and innovation).

A little earlier Mari-Noëlle Jégo-Laveissière, Orange’s head of innovation and marketing, was praising Huawei’s

“innovative approach in research and development” that was part of a partnership “to invent and build high efficiency telecoms networks by 2020” – though mainly in fixed rather than mobile.

At a Huawei telecoms exhibition and conference in London in late 2018, all four UK operators – BT’s EE, Telefónica’s O2, Three and Vodafone – were exhibiting, all happy to be associated with the company. Canadian operators such as Bell Canada and Telus were at the same event.

I’ve met senior executives from companies such as TDC of Denmark at Huawei’s events in China, all happy to praise the company.Make no mistake, operators – certainly the CTOs of operators – have loved Huawei. Do they still? They’re reluctant to say.

The UK government is insisting that its security services and cyber security experts “know more about Huawei than any country in the world” and are confident they can manage the risk.

All Huawei systems are studied in detail by a specialist team of security experts, paid for by Huawei but employed directly by the UK’s intelligence services, in a high-security unit.

This unit, the Huawei Cyber Security Evaluation Centre (HCSEC), said last year that it had discovered “several hundred vulnerabilities and issues” that it has reported to operators in the past year.

“Some vulnerabilities identified in previous versions of products continue to exist.”

It judged these to be engineering failures rather than attempts by Huawei to plant back doors through which information could be extracted.

Huawei’s Zhang said: “We have supplied cutting-edge technology to telecoms operators in the UK for more than 15 years. We will build on this strong track record, supporting our customers as they invest in their 5G networks, boosting economic growth and helping the UK continue to compete globally.”

He added: “We agree a diverse vendor market and fair competition are essential for network reliability and innovation, as well as ensuring consumers have access to the best possible technology.”

Joe Barrett, president of the Global Mobile Suppliers Association (GSA), of which Huawei and other vendors are members, says: “Operators and equipment vendors are working together to develop cybersecurity testing approaches that reflect the way 5G networks will be used. GSA believes that this collaborative approach is critical in delivering end-to-end security of 5G communications and services.”

Paul Beastall, head of strategy at research and design company Cambridge Consultants, welcomed the UK decision: “The government has struck an artful and sensible compromise. Now it’s time to turn our attention to the many transformative applications for 5G technology.”

Beastall, who also chairs the UK5G test beds and trials working group, said 5G “means much more than faster speeds to and from our smartphones. The advantages in reliability and latency mean we can now look forward to a new mobile revolution. The new applications that particularly excite me include autonomous vehicles, much wider access to virtual reality and augmented reality, and smart agriculture, where we can digitise farming, bringing huge benefits in precision and efficiency.”