The UK press broke the news today (24 April 2019) that the UK government will not ban Huawei from supplying 5G technology in the UK, albeit that there will be restrictions as to what it can supply.

Germany has already rejected a ban on Huawei equipment, and much of the EU is set to do the same, according to industry insiders.

This creates an interesting position. UK security sources say they can manage any risk from Huawei equipment; US security advisors say the risk is unacceptable. Astute observers are of the opinion that Theresa May took an economic decision rather than a political one – because swapping out Huawei equipment at this stage would incur both delay and additional costs. However, what has not been reported is that this is undoubtedly the result of extensive industry lobbying.

Huawei has sold or trialled equipment with many European operators – including 3 UK, Vodafone, Deutsche Telekom, SFR, Bouygues Telecom, BT/EE, Telecom Italia and Proximus – and BSS and OSS systems to others. Announcing Q1 2019 revenue is up 39%, the company noted that it had now signed 5G contracts with 40 carriers and shipped more than 70,000 base stations.

In general, Huawei is acknowledged to be cheaper and more advanced in 5G maturity than its rivals, with BT’s Chief Architect Neil McRae saying in November 2018 “there is only one true 5G supplier right now and this is Huawei – the others need to catch up.”

And then there’s that behind-the-scenes lobbying. Some of it is more public, with Mobile UK – the trade association for the UK’s network operators – repeatedly warning that there would be significant delays of up to two years in introducing 5G to the UK and additional costs of between £4.5 and £6.8 billion if Huawei equipment is banned entirely.

Faced with the prospect of being the PM-that-killed-5G, Theresa May might have preferred to incur the disapproval of the US, which is ahead of Europe in its 5G plans in any case, than risk another disastrous delay – particularly when the industry itself is telling her the risks are manageable.

There is always risk in network rollouts. Network operators insist on multi-vendor strategies to mitigate the risk of over-reliance even on European network equipment providers (NEPs) such as Ericsson and Nokia. Then there’s the uncomfortable fact that Huawei and ZTE are caught in the middle of the US-China trade war, along with a host of companies from either side. Making it hard to separate fact from fiction and posturing from realistic concerns. Europeans could reasonably take the position that if the trade war is resolved, any European ‘sacrifice’ might have been in vain or, rather, we would have accepted additional costs and delays in 5G simply to increase US pressure on the Chinese.

A cynical observer might say that it is all very well for the US which has the margins to sustain investment; Europe cannot afford to fall even further behind and has insufficient margin to waste any money whatsoever (5G is expensive enough, thank you very much).

Like most politicians, Theresa May relies on advisors as to what is in the best interests of the UK when it comes to technology, and the fact is that much ‘advice’ comes directly from the telecoms industry, which now has a hugely successful lobbying arm. Clearly the operators themselves want to continue to work with Huawei and are resisting any attempts by government to interfere.

This reminds us that either networks are commercial entities, run on a commercial basis, or they are public assets which logically should be publicly owned. Government policy is somewhat wishy-washy on this aspect; but as connectivity reaches deeper into our lives, this issue will continue to crop up. How much should firms with such potential reach be controlled by regulation and legislation? Should any private firm, with its own commercial agenda, have so much power and intrusive influence on whole populations?

For now, Huawei seems to have its operator friends to thank for escaping a ban in Europe. Considerably more than 5 Eyes will be on it going forward to ensure it is a neutral technology vendor and does not allow political interference at home to sway it from the path of righteousness. The rest of us are left hoping that the operators can, as they say, manage any risks presented by Huawei, or any other NEP for that matter.

Posted by Teresa Cottam

Teresa helps B2B service providers improve their commercial results and the customer experience they deliver through research, insight and analysis that builds effective strategy. She is a judge of the GSMA GloMo's for customer experience and enterprise innovation, and for the UK Cloud awards. You can follow her on Twitter @teresacottam

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