Cyber security review may spell end for Huawei 5G deal

Via Yahoo Finance

The National Cyber Security Agency in the UK is expected to conclude that US sanctions against Huawei will make it impossible to use the Chinese company’s technology as planned for 5G networks.

The emergency review, announced on Sunday, is designed to pave the way for Downing Street to push for the total elimination of Huawei equipment in British phone networks by 2023 and quell a Conservative backbench revolt.

That move will amount to a hasty reversal of the policy announced by ministers in January to limit Huawei to 35% of the British 5G network supply. It also risks irritating China and adding hundreds of millions of costs to BT and other phone companies.

Leaks on Friday suggested that Downing Street was preparing the ground for a dramatic climbdown.

A government spokesman said: “Following the US announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have to the UK’s networks.”

In early May, the US said it would impose fresh sanctions against Huawei as part of a long-running campaign against the company, whose technology, the White House claims, could be exploited by China to conduct surveillance against the west.

The US sanctions, due to be introduced in September, would prevent Huawei from using US semiconductors and software to build 5G equipment and force it to source alternatives, most likelyfrom China.

Whitehall sources said the threatened US restrictions meant that any review would almost certainly say that Huawei posed a security risk. A particular concern was that Huawei would become reliant on unfamiliar and untested components, which could be exploited.

READ ALSO  UBI spurns Intesa's offer and pledges to boost dividends

Huawei has repeatedly denied that its technology is used for surveillance, and said it would cooperate.

Victor Zhang, its vice-president, said: “We are happy to discuss with NCSC any concerns they may have and hope to continue the close working relationship we have enjoyed for the last 10 years.”

The Chinese company had become the leading supplier of 5G equipment in a market otherwise dominated by Ericsson of Sweden and Nokia of Finland, and was known for producing cheaper kit, which made it attractive to BT and Vodafone.

However, British political attitudes to China have hardened since the start of the coronavirus crisis amid complaints that Beijing was slow to acknowledge the seriousness of the disease when it first emerged in the city of Wuhan.

Sir Iain Duncan Smith and Bob Seely have led a group of Conservative MPs who have been demanding that Huawei’s position be reduced to zero; they now believe they have the numbers to block government attempts to legislate for a 35% cap on Huawei in Britain.

On Sunday Seely tweeted that there were “now 59 MPs” in the Conservative Huawei Interest Group – in theory, more than the 44 or so rebels required to defeat Johnson’s government despite the Tories’ healthy Commons majority.

Matthew Henderson, director of the Asia Studies Centre at the Henry Jackson Society, said: “This review is recognition that the government’s previous position on Huawei was untenable, both due to the scale of opposition in parliament and from our allies.”