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Summary
- A change of policy is on the cards in the UK with respect to 5G services after the FCC orders
- Huawei Technologies Company and ZTE Corporation have been designated as national security threats by the US FCC
- BT Group and Vodafone are expected to maintain adequate reserves of Huawei’s equipment
The British government might disallow Huawei, the Chinese telecom giant from providing the 5G infrastructure in the United Kingdom after the sanctions were imposed by the United States on the cheapest telecom technology provider. A change of policy is on the cards for the UK as it is one of the closest allies of the Trump administration along with a prospective free trade agreement (FTA) in the pipeline. A new bill with reference to the rollout of 5G services is expected in July.
The Federal Communications Commission (FCC) released orders on 30 June, according to which two Chinese multinational telecoms, Huawei Technologies Company and ZTE Corporation, were formally designated as national security threats. The FCC released these orders based on the overwhelming stock of evidence provided by its intelligence agencies.
Consequent to this action, these telecom giants would not be able to access the FCC’s Universal Service Fund of US$8.3 billion for providing any network equipment’s or services. On 19 November 2019, a ban on the use of universal service support was imposed on companies posing as national security threats. The Chinese telecom majors are covered under this rule because of their substantial ties to the Chinese government, which could use these companies for espionage activities, intelligence, surveillance, cybersecurity attacks, and unauthorised usage of public data stored on the core network components.
According to the FCC, both the Chinese telecom majors are subjected to Chinese law, obligating them to cooperate with the country’s intelligence services and have close ties with China’s military machinery and the Chinese Communist Party. The idea is to disallow the Chinese Communist Party to exploit network vulnerabilities and compromise the communications infrastructure, which play a critical role in a country’s defence.
According to some media reports, the UK telecom operators and 5G providers, BT Group and Vodafone were asked to maintain adequate reserves of Huawei equipment last month, as the UK was expecting the sanctions to be imposed on the Chinese telecom giant by the United States.
Preparation already on build 5G infrastructure sans Huawei
Huawei was a prime contender to deliver 5G infrastructure in the UK because it is one of the cheapest providers of the new-age technology. The latest technology in the mobile telecommunications that will enable its users to perform more functions than just high-speed browsing and surfing at present, such as interconnecting and controlling entities such as driverless cars and AI-powered machines. Huawei, the Chinese telecom giant, and the mobile manufacturer is one of the pioneers of 5G technology.
In the last week of May, the UK’s National Cyber Security Centre hinted towards banishing Huawei from the borders of the country. Due to pressure exerted by the Trump administration on its allies, the United Kingdom has drawn plans to completely eliminate the role of Huawei by 2023.
In January this year, Huawei’s role was restricted to a mere 35 per cent of the network infrastructure and that too on the non-core parts. Huawei was disallowed to operate with the core parts in the UK as they store data.
A fallout of US-China conflict
Huawei has already started to face a backlash in a lot of countries. It all started with the US-Huawei conflict in 2018. FBI (Federal Bureau of Investigation) officials first warned the citizens of USA not to buy Huawei smartphones. The backdrop of this conflict was US-China trade war. This was followed by a report, which revealed that Facebook gave Huawei’s illegal access to user data, following which a lot of major countries such as Australia banned Huawei and asked telecommunication and technology companies to stop working with Huawei. Later that year, Huawei was also caught cheating on a benchmarking test. This was followed by the United States of America, in January 2019, putting Huawei under more than 20 indictments for theft of trade secrets as well as fraud. In the meanwhile, US officials stated that any country using the technology from Huawei poses a threat to the United States.
In the war of words between US and China, the demand from the Trump administration primarily included that China should improve and make its trading practices fair, by changing economic policies, and it also accused Chinese companies such as Huawei of stealing data and other intellectual property from the United States of America. This all came into light, post a historically high trade deficit being highlighted with China by the current US government.
Huawei and the UK relation
In addition to the problems surrounding Brexit and its implications for the United Kingdom as well as the other parts of the European Union, a major economic downturn was inflicted by the trade dispute between China and the United States. Primarily, this was caused by the US asking its allies such as the United Kingdom and France to not indulge in any trading activities with China or to impose high tariffs on goods being exported to the country.
The Vice President of Huawei’s UK Operations, Victor Zhang has written an open letter last month, which was an effort to make an appeal to the UK government to allow the operations of the company to continue in the country. The letter mentioned that the company is strictly following the government and the NHS guidelines, and they will beat the pandemic by working together with everybody else. The letter mentioned that the usage of mobile data had increased by approximately 50 per cent in the country, since the beginning of the lockdown period, which has put the telecommunications systems in the country under intense pressure.
Further worsening the situation, there are conspiracy theories doing rounds over the internet regarding the 5G technology. According to the theory, 5G has been causing the novel coronavirus. However, the UK telecom regulator, Ofcom, has quashed the probability of any link between the two.
Meanwhile, the UK’s telecom old warhorse, BT Group Plc (LON: BT.A), which has suspended its dividend pay-out for the first time in a decade is looking to fibre up nearly 20 million rural households in the United Kingdom by the end of this year. In addition, Ericsson, Nokia, and Qualcomm have joined forces in the development of 5G network infrastructure before 2021. UK is also likely to reap benefit through an FTA with the US.
