The UK is blocking Huawei from its 5G network quickly

The UK is blocking Huawei from its 5G network quickly
The UK banned Huawei from its 5G telecom network, and reversed January's decision to allow the beleaguered Chinese technology company a limited role in building the country's high-speed wireless infrastructure.

The British government announced on Tuesday that operators such as BT (BTGOF) and Vodafone (VOD) had been granted until 2027 to remove existing Huawei equipment from their 5G networks. Minister of Culture and Culture Oliver Duden said that the new US sanctions imposed on the company in May "significantly changed" the scene.

"Given the uncertainty this creates about Huawei's supply chain, the UK is no longer confident that it will be able to guarantee the security of future Huawei 5G equipment," Dawden said.

The decision was a big win for the Trump administration, which was pushing allies to exclude Huawei from their 5G networks. US Secretary of State Mike Pompeo announced last month that "the tide is turning against Huawei as citizens around the world wake up to the danger of the CPC observer state." But it risks a backlash from China as Britain looks for new business opportunities around the world after Britain leaves the European Union, and will delay the 5G offering across the country for a year.

The American campaign against Huawei achieved mixed successes until the new sanctions in May increased the company's ability to manufacture and obtain semiconductor chips using American-made technology.

This sparked another British security review of the company’s involvement in the British network, which led to the National Security Council’s decision on Tuesday to order the phased removal of its technology.

The decision is a big hit for Huawei, which has been operating in Britain for 20 years. Europe is a key market for the company, accounting for 24% of sales last year. Huawei announced on Monday its half-year results earlier than usual, reporting slowdown in revenue growth. The company is already seeing a drop in smartphone sales, after Washington blocked it from accessing popular Google apps. As a result, phones have become less attractive in markets outside China.

New U.S. sanctions place restrictions on companies like TSMC (TSM), a Taiwan-based company, from exporting computer chips and other major components to Huawei. Without it, Huawei could not build 5G terminals and other equipment.

"Based on the current direct export base set by the United States, I really believe Huawei 5G equipment business is in serious danger," said Edison Lee, Jeffreys analyst, last month.

British Prime Minister Boris Johnson faced mounting pressure from lawmakers within his party, along with the Trump administration, which argues that the Chinese government can use Huawei to spy and even sabotage.

Washington has warned that intelligence sharing between the United States and the United Kingdom and military cooperation could be at risk if Britain goes ahead with its plan. Under Chinese law, Chinese companies can be ordered to operate under the supervision of Beijing. Huawei has consistently denied that it will help the Chinese government spy, and says it is "100% owned by employees".

The Chinese Foreign Ministry spoke early Tuesday before the United Kingdom announced, and repeated a previous warning from its ambassador that the decision would have consequences for the broader relationship between the two countries.

Chinese Foreign Ministry spokesman Zhao "Whether the UK is able to provide an open, fair and non-discriminatory business environment for Chinese companies ... is a tangible test of British markets after Britain's exit from the European Union, and is also an indication of China's investment in the United Kingdom." Legian said.

Huawei has worked hard to persuade the UK government that it is a trustworthy partner, launching an advertising campaign last month confirming its history of investment and job creation in the country. And this month it announced it had secured approval to build a $ 1.25 billion sprawling research facility in Cambridge.

Huawei is already an integral part of Britain's current 4G infrastructure. Dawden did not say whether the current Huawei equipment in these networks would be affected. BT CEO Philip Jansen has warned that it will take 10 years to get all Huawei devices out of UK telecom networks. He said that trying to do this faster could lead to customer interruptions.

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