UK and Huawei: Proposed law could hit British telecoms firms

New rules would impose tough penalties on UK telecoms firms if they breach ban on gear made by China’s Huawei, which describes the move as ‘politically motivated’.

Huawei logo
The US has campaigned for its allies, including the UK, to exclude Huawei on the grounds that its proximity to China’s government constitutes an unacceptable security risk [File: Chris Ratcliffe/Bloomberg]

British telecommunications companies could be fined up to 10 percent of their turnover or 100,000 pounds ($133,140) a day if they contravene a ban on using equipment made by China’s Huawei Technologies Co Ltd under a new law.

The Telecommunications (Security) Bill, put forward on Tuesday, would boost the security standards of the UK’s telecoms networks and remove the threat of high-risk vendors, the government said.

The UK decided in July to ban the use of equipment made by Huawei – one of the world’s largest makers of telecommunications gear – in 5G mobile phone networks from the end of 2027, citing concerns that sanctions by the United States meant the Chinese company would not be a reliable supplier.

The Bloomberg news agency quoted people familiar with the matter as saying that under the latest proposal, the ban could kick in as early as September 2021. The UK has already set limits on telecom companies buying Huawei equipment, which are due to take effect after December.

US pressure

The US has campaigned for its allies, including the UK, to exclude Huawei on the grounds that its proximity to China’s government constitutes an unacceptable security risk, which the company has denied.

Policies on Huawei map [Bloomberg][Bloomberg]

The bill aims to enshrine the British government’s July decision in law and manage any risks from other high-risk vendors in the future, with tough penalties for telecom companies that break the rules.

In January, the UK granted Huawei a limited role in 5G networks, leading to a parliamentary rebellion. Prime Minister Boris Johnson reversed his position in July after US sanctions introduced in May affected Huawei’s supply chain.

Digital Secretary Oliver Dowden said the benefits of 5G and fibre networks could only be realised if they were secure and resilient.

“This groundbreaking bill will give the UK one of the toughest telecoms security regimes in the world and allow us to take the action necessary to protect our networks,” he said.

‘The digital slow lane’

Huawei said it was disappointed that the UK’s government was looking to exclude it from the roll-out of 5G.

“This decision is politically motivated and not based on a fair evaluation of the risks,” said Vice President Victor Zhang.

“It does not serve anyone’s best interests as it would move Britain into the digital slow lane and put at risk the Government’s levelling up agenda.”

The government said the tougher security standards in the bill would help protect the UK from potential cyberattacks by countries and criminals.

British regulator Ofcom will be given the duty of monitoring and assessing the security of telecoms providers.

Network providers have been stockpiling parts made by Huawei while sourcing alternatives, according to Bloomberg.

An early ban on installing those parts could increase costs at companies such as BT Group Plc and Vodafone Group Plc, which would be forced to speed up the overhaul of parts of their networks, people familiar with the companies’ plans told Bloomberg.

Without Huawei, UK mobile networks will lean heavily on its Nordic rivals Nokia Oyj and Ericsson AB. The government is due to publish more details about diversifying the UK 5G supply chain in the next few weeks.

Source: News Agencies

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