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UK agencies hasten moves to rebuild telecoms manufacturing

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Four UK government departments are considering moves to spend millions to enable some of the country’s surviving telecoms engineering talent to rebuild a manufacturing capability.

The aim, according to Capacity’s information, is to make the country more resilient, especially in the face of a potential ban on Huawei.

Widespread reports over the weekend and today suggest that prime minister Boris Johnson will chair a meeting of the National Security Council on Tuesday, at which UK operators will be told not to use new Huawei kit for their 5G networks. They will also be given just a few years to remove existing Huawei kit from their current mobile and fibre networks.

BT and Vodafone – as well as Huawei – are protesting at the change in policy, set in January, which limits Huawei content to 35% by value and bans it from core parts of networks.

BT CEO Philip Jansen said in a radio interview this morning: “Huawei has been in the telecoms infrastructure for about 20 years and a big supplier to BT and many others in the UK telecoms industry. It is all about timing and balance.” Is it possible to remove Huawei from the whole infrastructure? “I think that’s impossible to do in under 10 years,” said Jansen.

He warned that, if Huawei kit were removed in haste, “outages would be possible”. And he warned that an embargo on buying from Huawei would mean BT “wouldn’t be able to get software upgrades”.

Meanwhile a set of UK government-backed agencies called the Catapult programme, with a total of about £1 billion in funds, has put proposals to government departments on identifying existing talent in the radio access network (RAN) business and seeing whether it could be nurtured into a full-blown industry.

There is already a widespread recognition across the industry that open standards would enable more competition and innovation in the RAN industry and reduced operators’ dependence on a single supplier. Last week Nokia became the first major company to declare in favour of open RAN (O-RAN) technology for base stations.

The UK has lost most of its mobile telecoms business over the past 20 years, with the disappearance or acquisition of companies such as Marconi, Plessey and STC and the closure of UK offshoots of foreign companies such as Nortel.

The UK has lost many of its technology pioneers to foreign ownership – notably microchip design company Arm, now owned by SoftBank. The UK government is planning to put a National Security and Investment law through Parliament, that would enable such acquisitions to be blocked if they were not in the national interest.

But those advising the government are not planning to propose a full-scale rival to Ericsson and Nokia, or indeed Huawei itself. “Creating a full competitor is not the way to go,” suggested one person close to the process.

The government has already agreed to create an £800 million UK version of the Defense Advanced Research Projects Agency (DARPA), the US Department of Defense’s long-term development agency among whose credits are the internet itself, which was called Darpanet in its early days. A UK ARPA would look at projects with a five-to-10-year delivery target.

The four government departments that are looking at proposals, which are still in the early stage of formation, are the Department for Business, Energy and Industrial Strategy; the Department for Digital, Culture, Media and Sport; the Department for International Trade; and the Cabinet Office, which works closely with the prime minister’s own team in 10 Downing Street.

The Treasury is also involved. It was due to announce its Comprehensive Spending Review – an occasional detailed statement of priorities – this month, but in March decided to delay it because of the pandemic.

Those looking at telecoms-related projects that might benefit from government support or encouragement include the RAN, optical technology for backhaul networks, cyber resilience and quantum key cryptography.  

The key concern is resilience, Capacity was told. “If one supplier gets kicked out, what happens?”