Economy /
The UK Bans Huawei
The Chinese network supplier Huawei has been banned from the 5G network in Great Britain. The ban applies from the end of the year. Even parts that have already been installed must be removed.
With the UK banning the Chinese network supplier from real-time mobile 5G, Huawei is experiencing its most significant setback in Europe to date. The step by the UK government was announced by Digital Minister Oliver Dowden on Tuesday in Parliament in London. The decision will come into effect from the end of the year. As a result, network operators will be prohibited from purchasing 5G components from Huawei. In cases in which providers have already partially equipped their networks with Huawei, the government grants a period until 2027 by when all components need to be removed.
The Chinese company Huawei is internationally recognized as a leading 5G provider. In Europe, there are two regional rivals, Ericsson and Nokia, which also offer network equipment.
The United States has continuously accused Huawei of cooperating closely with the Chinese government, while the company has continuously denied these accusations. The measures taken by the government now, are coming after Prime Minister Boris Johnson’s government had already severely restricted Huawei’s deployment in 5G expansion at the beginning of the year, but it did not wholly cease its operations. The UK, meanwhile, may not be the last European country that issues a ban. Currently, a ban on Huawei is also being discussed in Germany.
Huawei criticized the ban in the UK, stating that the British government did not base its “disappointing change of course” on Huawei’s misconduct, but on “the unjustified sanctions imposed by the US government” – the latter recently imposed stringent trade restrictions on Huawei.
In a security assessment by British authorities, it was argued that these tightened sanctions could force Huawei to go with alternative production processes, which could endanger security and affect delivery capability.
Huawei is doing well economically. In the first half of the year, sales increased by 13.1 per cent to €57 billion, the company stated. With the expulsion, the British government risks breaking an election promise: In December, the conservative party had promised the British nationwide access to broadband technology.
The British network operators Vodafone and BT had warned that exclusion from Huawei could cost them billions and delay the network expansion significantly. However, it is conceivable that network operators exaggerated the effects. In any case, they are forced to modernize their networks. The third provider in the British mobile phone market O2 does not use Huawei, allowing for a potential competitive advantage.
With the Huawei decision, the British government is distancing itself from its long-term partner China. The conservative government under former Prime Minister David Cameron, in particular, had enchanted China as a partner. Chinese companies accepted the invitation: billions have flowed from China to British companies in recent years. Inter alia, the manufacturer of the London taxis LEVC is owned by Chinese nationals, as well as the catering chain Pizza Express and the London Metal Exchange. Moreover, China Huaneng Group is building what is possibly the largest battery factory in Europe in south-west England, and the Chinese energy group CGN is playing a pivotal role in the planned nuclear power plant Hinkley Point.
However, Chinese involvement in the energy sector, in particular, caused unease in Great Britain to the extent that Prime Minister Boris Johnson was increasingly criticized from within his party.
Relations with Beijing are also strained by the dispute over China’s security law in the former British crown colony of Hong Kong and the UK’s decision to offer citizenships to the people from Hong Kong.
