Commentary on Political Economy

Sunday, 12 July 2020


Boris Johnson set to curb Huawei role in UK’s 5G networks

Boris Johnson is contending with a rebellion in the Conservative party over Huawei © FT Montage/Getty
Boris Johnson is expected to unveil plans this week to phase Huawei out of the UK’s 5G mobile phone networks following intense pressure from Conservative MPs and the Trump administration.
In a big U-turn, the prime minister is expected to ban the use of new kit made by the Chinese telecoms equipment maker in Britain’s 5G networks. The prohibition will take effect within months.
But Huawei is seeking an eleventh-hour meeting with Number 10 officials to plead with Mr Johnson not to fully kick the company out of the networks until 2025 at the earliest.
This would allow UK mobile operators more time to remove existing Huawei 5G equipment from their networks, and to switch to different suppliers.
Mr Johnson announced in January that Huawei would have a limited role as a supplier for the UK’s 5G networks, capping its market share at 35 per cent.
But his National Security Council will meet on Tuesday to review an official report that raises concerns about the company’s role.
The report by the National Cyber Security Centre, a branch of the UK signals intelligence agency GCHQ, was commissioned by the government after the Trump administration proposed new sanctions against Huawei that aim to cut it off from access to semiconductors made with US equipment.
British officials are concerned that, following the US sanctions due to take effect in September, it will be harder for the UK to vet any Chinese-made semiconductors used by Huawei.
Mr Johnson is also contending with a rebellion in the Conservative party over Huawei. Increasing numbers of Tory MPs are joining the Trump administration in claiming the company provides Beijing with an opportunity to spy on western countries.
The Conservative rebellion has been strengthened by China’s move to impose a tough new national security law on Hong Kong.
The government needs to placate MPs and the US sanctions is a route for them to do that
Government insider
One well-placed backbench Tory MP said there was now “huge” opposition to Huawei among his colleagues. The MP predicted the government would lose any parliamentary votes about the company’s current role as a limited supplier of 5G kit.
The risk of defeat was highlighted in March when 36 Conservative MPs voted against the government as Tory grandees tried unsuccessfully to change the law to exclude Huawei kit from British telecoms infrastructure after 2022.
It was the biggest Conservative rebellion against Mr Johnson since his general election victory in December.
One government insider said Downing Street was concerned. “The government needs to placate MPs and the US sanctions is a route for them to do that,” added the insider.
Conservative opposition to Huawei has been spearheaded by the China Research Group, a Tory caucus led by Tom Tugendhat, chair of the House of Commons foreign affairs select committee, and Neil O’Brien, a backbench MP.
But Huawei, which insists it is a private company rather than an arm of the Chinese state, is seeking to push back against the Tory MPs ranged against it.
Huawei has hired several prominent public relations firms in London. Burson, Cohn and Wolfe is the company’s primary PR agency, along with Finsbury. Both firms are part of the WPP group.
Flint Global, led by Simon Fraser, former permanent secretary at the Foreign Office, is advising Huawei on policy, while MHP Communications is leading on parliamentary relations.
The company also has several influential City of London grandees on the board of its UK arm — including John Browne, former chief executive of BP, and Mike Rake, former chair of BT.
BT and other UK mobile operators have warned that curbing Huawei’s role in British telecoms infrastructure could delay the rollout of 5G as well as disrupt services on other networks including 4G.
Operators believe the government will not allow Huawei to retain a long-term role in 5G, and is now focused on trying to ensure it does not have to rapidly remove the Chinese company’s kit that has been used in some of its other networks.
One industry executive said the Johnson government, if it sought to restrain Huawei’s role in the UK, was making a decision based on politics rather than security. “The UK is taking a political decision,” said the executive.
Victor Zhang, a Huawei vice-president, highlighted the company’s ability to help the government with its efforts to improve telecoms infrastructure — the Conservatives promised at the last election to provide gigabit download speeds to every home by 2025.
“The UK government should not make a hasty decision [on Huawei’s role in 5G] without all of the evidence,” he said. “5G is vital to the UK’s ‘gigabit’ strategy and the future of the digital economy.”

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