US Congress moves to denounce UK decision on Huawei

It would be fair to say the Supply Chain Review conclusion received a less than enthusiastic response in the US, and now it appears Congress is stacking the deck for an offensive.

The House of Representatives has introduced what is known as a ‘Simple Resolution’ condemning the UK accepting attitude of the UK, Huawei effectively as an agent of the state and the Chinese Government.

Presented to the House by Congressman Michael McCaul, House Republican Conference Chairwoman Liz Cheney, and Representatives Ted Yoho, Mike Turner and Mike Gallagher, the Resolution denounces the UK decision to include Huawei in 5G plans, though it is not entirely clear what the end game here actually is. This Resolution could be used to force a firmer stance against the UK, a worrying sign with trade talks set to commence in the very near future.

“We are extremely disappointed that the United Kingdom seems poised to allow CCP [Chinese Communist Party] controlled Huawei to build much of their next generation 5G networks,” the politicians said in a joint statement.

“Huawei equipment is absolute poison – providing them access to any aspect of a 5G network compromises the integrity of the entire system and will result in network data being sent back to Communist Party leaders in Beijing.

“We hope the UK will reverse course on this consequential decision and work with us to build a 5G future that will not only protect our mutual interests but will safeguard the values we share.”

While the Resolution does not propose any new rules or amendments, it contains dozens of statements to paint a picture. This could be viewed as the prologue, setting the scene, creating the bad guy, before the main part of the story begins. Some of the points include:

  • All Chinese companies, private and state-owned, are under the effective control of the Chinese Communist Party
  • Supply Chain Review measures are not enough to ensure the security and fidelity of the United Kingdom’s 5G network
  • China has a series of laws which forces Chinese companies to effectively act as the intelligence gathering arm of the Government

This document could represent the opinion of the House of Representatives and could be used as a weapon against China and the UK.

There are two key takeaways from the Supply Chain Review. Firstly, Huawei has been deemed a ‘high-risk vendor’ but can continue to operate in the UK. Secondly, ‘high-risk vendor’ equipment will be limited to a 35% share of a telcos radio inventory, while said share can only carry 35% of the total internet traffic.

While this is a position which has been welcomed in the UK, it faced fierce criticism in the US, despite President Trump staying quiet on the matter. Arkansas Senator Tom Cotton suggested the UK was handing the front door keys to the Chinese, while several has maintained the stance that the sensitive and non-sensitive parts of the network cannot be separated.

Secretary of State Mike Pompeo took a much more mellow approach when visiting London last week. Pompeo was not overly critical, but statements were made suggesting the UK had time to change its mind. Perhaps this is a hint that the US will continue lobbying the UK to ban Huawei while trade talks are conducted.

Looking at what this actually means is a bit more nuanced and speculative, however.

A ‘Simple Resolution’ is a legislative measure passed by one of the two House’s of Congress. As it has not been passed by both, it cannot be written into law, but it can be used to express a sentiment of the politicians in the House. This sentiment could be used to create a Committee, pave the way for a Bill to be introduced, or force policy decisions in other departments.

This Resolution is important, but unless the Senate passes a similar Resolution, its impact will be limited. In this Resolution, the politicians are effectively condemning the UK’s actions and every Chinese company as an agent of the Chinese state, therefore we suspect it wouldn’t take much to gain support in the Senate.

However, if both Houses pass the same Resolution, the US will have an official stance against every Chinese company and the UK’s adoption of Huawei technology. Some of the wording in this document makes for a potentially hyper-aggressive position against China.

As an official Resolution of Congress is a measure of the opinions of the members, it could be a powerful document. The State Department could be forced to take a much more aggressive stance against the UK in trade talks, the President could be convinced by the majority into signing some sort of executive order, or it could pave the way for much more aggressive legislation against ‘high-risk’ companies.

What is always worth remembering is that the US Constitution bans the Government from legislating against a single company, but this does look like a political preparation for a renewed assault against Huawei.

With Senator Cotton’s proposed Bill still on the floor of Congress, an official intelligence sharing ban with the UK and other countries which are deemed Huawei friendlies is still a possibility. And with the trade talks looming, the US still has a few carrots and sticks in store for the UK.

Some might have suspected this would be the end of the Huawei debate and the beginning of the UK’s 5G future, but while the US can still poke and prod politicians, the Huawei debate is still alive. It remains to be seen what impact this Resolution in the House of Representatives has, but it could be very significant.

Boris Johnson is starting to look short of friends

Transatlantic conflict was to be expected following the Supply Chain Review decision, but Downing Street could soon become the battleground for some ‘blue-on-blue’ warfare.

Secretary of State Mike Pompeo is en route, presumably to sit in Downing Street before huffing and puffing, but it is enemies closer to home which might case the most immediate of problems. Alongside the enthusiasm for the Huawei compromise, there have of course been just as many critics.

The House of Commons proved to be somewhat of a tough test for the Supply Chain Review.

“The Prime Minister has gone for the cheapest, least secure option, but it does not take a genius to work out why Huawei is so competitive in cost,” said John Nicolson, an MP representing the Scottish National Party. “It is the Chinese Communist party branded as a company, and the Conservative Government have chosen low cost over security.”

“I cannot work out whether it is naivety or arrogance that prevents the UK Government from seeing the high risk presented to our national security by Huawei,” said Carol Monaghan, another SNP MP. “This is a company financed by the Chinese Communist party, and we are giving it an open door to our security.”

And unfortunately for Prime Minister Boris Johnson, there are also vocal critics within his own party.

“It was founded by a member of the People’s Liberation Army. Even if it were not an arm of the Chinese Government, the 2017 law requires that it take instruction from the Chinese intelligence agency,” said Conservative MP David Davis. “In the future, the size and complexity of the problem we are trying to protect against will be enormous. Huawei alone—forget the rest of China—has tens of thousands of researchers working on this, and I am afraid that the only way to protect our safety is to ban it.”

“I have spoken at length to security officials, who will always say that defending in cybersecurity is a game of catch-up – always catching up with the next algorithm change, and we can never guarantee that we spot it sometimes until too late,” said another Conservative MP Sir Iain Duncan Smith.

Criticism from the other side of the political aisle is part and parcel of the game, but internal sniping, blue-on-blue warfare if you will, could cause damage. With Brexit still a potential hot spot for Downing Street, Johnson could use as much support as possible internally.

That said, the impact of the Supply Chain Review on European relations might be somewhat positive, though this is a long-shot.

The UK stance on Huawei and relationships with China now looks much more aligned with the Europeans than the US. In 5G security guidance offered to member states, the European Commission has suggested nations air on the side of caution, but it has made no direct links to Huawei or China as a state. The dangers have been identified, but the finger of accusation has not been pointed.

There are also European nations who are looking to the UK. Germany and France, amongst others, might well be buoyed by the decision. Numerous EU member states have been distancing themselves from a complete ban, and the UK might well be the first domino to fall in favour of Huawei. Despite the Brexit fracas, the UK is still an influential voice; if Huawei is considered safe for London, it might well gain traction elsewhere on the bloc now.

This is of course the polar-opposite position from the US, where the reaction to the Supply Chain Review has been varied.

“Allowing Huawei to build the UK’s 5G networks today is like allowing the KGB to build its telephone network during the Cold War,” said Senator Tom Cotton.

Cotton is one of the most strident opponents of Huawei, who’s attitudes towards China flirt with the line of xenophobia, so it is hardly surprising to hear such statements. Although President Donald Trump has been relatively quiet on the announcement, Cotton has effectively been a White House puppet over recent months, very enthusiastically portraying the party line.

“British decision to accept Huawei for 5G is a major defeat for the United States,” said Newt Gingrich, a former-Speaker of the US House of Representatives. “How big does Huawei have to get and how many countries have to sign with Huawei for the US government to realize we are losing the internet to China? This is becoming an enormous strategic defeat.”

This is perhaps what the UK and the US will have to accept over the coming months; the special relationship is coming to an end. In dismissing demands and threats from the White House with regard to Huawei, the UK is effectively distancing itself from the US. This is a strained friendship already, and we suspect the White House does not like to be ignored.

The issue with many compromises is that no-one is entirely satisfied. This decision from the UK Government looks to be the most logical and proportional response to genuine concerns on both sides of the argument, though as it is a half-way house, it has been opened-up to political dissection.

With disagreements in the Conservative Party and contradiction to US policy, the Prime Minister is losing friends. In aligning the telecoms policy with the European Commission, he might look to the continent for allies, though considering the on-going Brexit conflict, this will also be a tricky sell. Downing Street is looking like a very lonely place.

UK made the correct call on Huawei but the devil is in the detail

The UK government’s decision to opt for a classic British fudge on the matter of Huawei’s involvement in its 5G networks was the least bad choice.

The options essentially boiled down to: 1. A total ban, 2. No ban at all; 3. Some form of restriction, and we went for number three. Lots of commentators, many of whom only recently acquired their telecoms industry expertise, have pointed at that you can’t have it both ways and either Huawei poses a security threat or it doesn’t.

They do have a point, but the government seems to be saying it’s not a binary matter and that Huawei poses just a bit of a threat and that it’s managable. Again, it’s reasonable to question the wisdom of allowing any threat when there are alternative networking kit vendors who everyone seems to think wouldn’t harm a fly.

All this simplistic analysis fails to take into account the commercial reality on the ground. Not only is there already a fair bit of Huawei kit dotted around UK networks that would have to be replaced at considerable expense, but artificially reducing competition to just two players would be bound to drive up costs. Furthermore many still think Huawei’s is the superior offering in a lot of cases, meaning the resulting networks could be materially inferior for Huawei’s absence.

The other aspect that seems to have upset people the most is the implication of the decision on our relationship with the Americans. They’ve been hassling us for ages to ban Huawei entirely but have presumably failed to present any compelling evidence of why we should. So then it came down to a political decision around whether or not we dare upset the US. Well it turns out we do.

Some of the Twitter hissy fits from US politicians have been hilarious. Here’s a selection.

President Trump, however, has been uncharacteristically silent on the matter. This possibly implies that he understands the dilemma his British counterpart faced and doesn’t want to throw a genuine attempt at compromise back in the face of a key ally. Having said that we’re only one tweet away from that theory becoming hopelessly obsolete.

For sober balanced analysis it’s best to step away from the rent-a-gobs in politics and the mainstream media and speak to people who have devoted themselves to the business of telecoms. “The decision seems to be consistent with the sentiment of our closest neighbours, though clearly out of sync with many of our Five Eyes partners, and the political arguments are going to rumble on,” Phil Kendall, Analyst at Strategy Analytics told

“As operators push network functions out to the edge, the NCSC is taking a clean view of what it wants to see – if it’s a core network function, irrespective of where that is being run, then the virtualization software can’t come from Huawei or any other HRV [high risk vendor].

“Irrespective of the rights or wrongs of the NCSC’s assessment of exactly where the risks become unacceptable for a critical national infrastructure, what we have here is finally some clarity. The UK’s operators can now move forward and plan their 5G network  rollouts accordingly. A three year window to get Huawei down to 35% of the 5G RAN feels achievable, though not painless for all involved.”

This 35% of he RAN threshold is the main ‘devil in the detail’ part of the assessment, since it wasn’t immediately obvious how it would be measured.

Kendall was once more on the case.

Overall, the UK policy will send a strong signal to the rest of Europe and the world that the use of Chinese equipment poses a security risk and should be limited,” said independent telecoms Analyst John Strand. “I believe that UK have created the framework for a European model and it will put a lot of more focus on security in telecom networks. There is a big chance that Germany will copy the UK model with some small changes.

“The use of Huawei equipment will be expressly prohibited in sensitive geographical areas in the UK, areas selected for national security reasons. Indeed, this is already practiced in France where Huawei equipment in restricted in Toulouse, home of Airbus and the European aerospace industry. A similar policy exists for Brest where French nuclear submarines are located.”

We also spoke to Ovum analyst Dario Talmesio and asked him for his initial thoughts “Not surprising at all, the only bad news for Huawei and CSPs is that Huawei need to be restricted to 35% share of the radio, which is a significant restriction,” he said. “Overall reducing the number of players, and thus industry diversity, is harmful for any technology. Diversity helps ecosystems and the UK will have a bit less differentiation as a result of the decision.

“CSPs in the UK have benefitted from the commercial pressure coming from Huawei. Specifically, margins in the UK are relatively low by international comparison meaning that any increase in cost to deploy and maintain networks will directly impact 5G rollout plans.”

On the other hand polling firm YouGov recently asked a bunch of random Brits what they thought of letting Huawei be involved and sentiment seemed to be against the idea. But then again those punters were presumably deriving their views from information provided by the aforementioned media dilletantes and partisan politicians, so it’s probably best to stick with a policy of not letting the man in the street dictate industrial policy.

The long and short of it is that Huawei is a major part of the UK telecoms industry and banning it entirely would have created major problems. Our security experts think the risk it poses can be mitigated and managed, and have clearly seen nothing from the Americans to contradict that. From a political perspective it’s good to see the UK making its own minds up, rather than just picking which superpower to appease.

Supply Chain Review offers clarity and new headaches for MNOs

Any decision is better than the purgatory of uncertainty which the telcos have been sitting in for months, but the Supply Chain Review offers a whole new wave of headaches.

There are still grey areas to consider, but the Department of Digital, Culture, Media and Sport (DCMS) has offered a foundation for telcos to build on. Some might be slightly disappointed by the decision, certainly some more than others, but any decision was better than playing the waiting game; action can now be taken.

Huawei’s contributions to a UK MNOs 5G radio inventory can not exceed a 35% share. However, another interesting element to consider is that Huawei radio equipment cannot carry more than 35% of internet traffic either. This presents new questions as to how networks are built. Huawei technology might not be able to be clustered in certain urbanised areas, which has been the trend in the past.

But new questions are arising for each of the players in the market.

Is Huawei to lose leadership position in the UK market?

Speaking during a call to the press, Huawei VP Jeremy Thompson said capturing 35% market share in any nation would be a job well done for Huawei, though this is assuming customer relationships are rebalanced.

For Huawei to capture 35% market share, it would have to be a major supplier to all the UK MNOs and for all the MNOs to use every inch of the 35% network share. This is a situation which is very unlikely to happen.

EE and Vodafone are over the 35% limit for Huawei equipment in their 4G networks, therefore these relationships will have to be structured down. Three named Huawei as its sole 5G RAN supplier, Samsung provided 4G RAN equipment, therefore it will definitely lose business here as well. There is room for growth at O2, but this is a telco it has not had notable success in recent years.

Huawei’s RAN equipment makes up less than 1% of O2 radio inventory, only present due to trials, and this is unlikely to change.

As Thompson pointed out, Huawei’s market share in the UK when the Supply Chain Review was initially launched was 35%. Its business with its three main customers will have to decrease for them to meet the targets in three years, and it is unlikely to increase its commercial activity with O2.

Huawei could very feasibly lose its RAN leadership position due to bureaucracy as opposed to head-to-head competition.

Three has the biggest headache of all

Three is not in a healthy position but fortunately its 5G deployment is not that advanced.

“We note the government’s announcement and are reviewing the detail,” said Three UK CEO Dave Dyson.

Last year, Three began stripping Samsung 4G equipment out of its network to ensure interoperability with its sole 5G RAN supplier, Huawei. Fortunately, Three has not been accelerating its deployment plans as quickly as EE or Vodafone, therefore does not have as much work to undo. Three will not have to start again from the beginning, but it will have to redevelop the strategy.

As a city-centric telco, the Huawei decision made sense as the Chinese vendor arguably has the best equipment for the situation. Investing so significantly in Huawei might have been a bold decision two years ago, but it is now looking like nothing short of a disaster.

Business as usual for O2

“Huawei kit makes up less than 1% of our owned network infrastructure,” said an O2 spokesperson. “We will continue to develop our 5G network with minimum disruption with our primary vendors Nokia and Ericsson.

“Whilst we agree with the government that diversity of supply is the best way to serve customers, careful consideration must be given to the distinction between ‘core’ and ‘non-core’ as 5G networks develop and evolve. We’ll now take time to review the full report.”

There are roughly a dozen Huawei radios in the O2 network, a legacy of trials during yesteryear prior to supplier decisions being made. O2 has said it will work exclusively with Ericsson and Nokia in the past, painting a gloomy picture for Huawei, though there is always room for change.

Earlier this month, O2 announced it would be aiming to integrate OpenRAN alternatives into some areas of the network. This was slightly unexpected news and would have altered deployment plans in pursuit of commercial efficiencies. This demonstrates that the plans are not 100% set in stone.

Huawei’s commercial relationship with O2 can only get better, and if it does want to maintain its RAN leadership position in the UK, it will have to figure out how to break into this business. Ultimately, very little changes for O2 unless it wants to change itself.

EE and Vodafone have some thinking to do

“While Vodafone UK does not use Huawei in its core – the intelligent part of the network – it will now analyse the potential impact of today’s decision on the non-core elements of its network (masts and transmission links),” a Vodafone statement reads.

“Vodafone UK uses a mix of Huawei, Ericsson and Nokia equipment for its 4G and 5G masts, and we continue to believe that the use of a wide range of equipment vendors is the best way to safeguard the delivery of services to all mobile customers.”

For its 4G network, Ericsson supplies 50% of the radio inventory, Nokia 12% and Huawei 38%. Vodafone CTO Scott Petty has previously suggested plans to phase out Nokia, though that position might have to be reconsidered. Vodafone will have to scale down its Huawei relationship moving forward into 5G and find a suitable replacement.

Interestingly enough, Vodafone has also launched its own OpenRAN initiative, though whether this technology is resilient for a straight swap remains to be seen. It will at some point, but Vodafone will not want to wait until that point.

EE is in a similar position.

“This decision is an important clarification for the industry,” said a spokesperson from EE parent company BT.

“The security of our networks is an absolute priority for BT, and we already have a long-standing principle not to use Huawei in our core networks. While we have prepared for a range of scenarios, we need to further analyse the details and implications of this decision before taking a view of potential costs and impacts.”

EE currently works with Huawei and Nokia. The share of Huawei radio inventory exceeds the 35% limit, though it has time and options to renegotiate over the next three years. It is a bit of a headache for the team, but not the end of the world.

The difficulty which EE faces is the current structure of the network. Huawei provides the radio equipment for the urbanised areas, while Nokia is focused on rural. The internet traffic crossing Huawei radios on EE’s network will dramatically exceed the 35% restriction.

Are Nokia and Ericsson in a stronger negotiating position?

For cut-throat sales opportunists, this is a very interesting position for Ericsson and Nokia. Unless OpenRAN makes significant progress in the short-term future, or Samsung starts swinging punches, 65% network share is effectively a straight shootout between the two.

As Heavy Reading Analyst Gabriel Brown has pointed out, the limits are only directed towards 5G access and is therefore more manageable, but the knowledge of restrictions will always be in the mind of some salespeople; this adds weight to the vendor negotiating position.

Ericsson and Nokia will of course never acknowledge this position, but these are commercial organisations who have seen profits eroded over the last few years. And the guys sitting at the negotiating table are salespeople who like getting big bonus checks.

Could this be the catalyst for OpenRAN and Samsung?

When there are challenges for some, opportunities will always be presented for others. Ericsson and Nokia are certainly set to prosper thanks to Huawei limitations, though the same could be said for the OpenRAN ecosystem and Samsung.

OpenRAN has been touted by US politicians as a potential alternative to Huawei equipment, Senator Mark Warner is proposing a $1 billion fund for the ecosystem, though needs might accelerate demand.

With Huawei’s RAN equipment under restriction, there is certainly a dent in the competitive landscape. It could have been a lot worse, but it will have an impact. The question is how much enthusiasm will be placed in the OpenRAN movement to compensate and create the competitive environment so many are hoping will emerge.

Vodafone and O2 have already dipped their toes into the OpenRAN waters, with commercial deployments to accelerate over the next 2-3 years, though the Huawei saga could make this seem like an attractive alternative to more. The UK Government has seemingly not banned Huawei completely for competition fears, therefore it might be tempted to invest in some developing ecosystems, as would EE and Three.

Samsung is a different story.

This is a vendor which has credibility in the RAN market but has never made a significant impact on the UK telco industry. It did have a healthy relationship with Three prior to the Huawei shift, but activities otherwise have been limited in this segment. Huawei limitations could present an opportunity.

At Three, it would make sense to head back to tried-and-tested waters, while other telcos might consider the Korean vendor to ensure increased diversity in the supply chain. If reliance and variety is the goal, few would want to put more eggs in the Ericsson or Nokia baskets.

With relationships in Korea with KT and SK Telecom, as well as Verizon in the US, Samsung has credibility. The Huawei woes might just be enough to tip the scale in this vendors favour, if it start to throw the right punches.

End of the UK road for ZTE?

The 35% limit is not a restriction for a single supplier, but for any suppliers who are deemed ‘high-risk’. Huawei and ZTE both fall into this bracket therefore it is likely to present a question to the telcos; do we work with Huawei or ZTE? There is room for a slice for each, but this is highly unlikely to happen, especially since the review concludes there is no way to mitigate the risk posed by ZTE.

When it comes to the global market share of RAN, ZTE is a company which falls into the ‘also ran’ category. It has experienced success in Africa and Asia, and of course in China, but exposure in Western Europe has been incredibly limited. In the UK, there is very little evidence of success, though Jersey Telecom named the vendor as its sole 5G RAN supplier.

Jersey Telecom will have to have a complete rethink of its strategy, like Three, but the writing seems to be on the wall for ZTE. This could be the end of the vendor as a player in the UK market.

Huawei gets the greenlight from UK Government

It seemed like it would never end, but the Supply Chain Review has now been concluded and while there might be limitations, it is pretty good news for under-fire Chinese vendor Huawei.

In short, vendors which are deemed ‘high-risk’ will not be able to provide equipment for the network core and will be limited to providing no more than 35% of the RAN equipment . These vendors will also be banned from providing equipment to Critical National Infrastructure or sensitive geographic locations, such as nuclear sites and military bases.

There are limitations for Huawei which could prove to be awkward, and perhaps a step-down from the market dominance it exhibited in the 4G era, but this is a significant win for the vendor.

“We want world-class connectivity as soon as possible but this must not be at the expense of our national security,” said Digital Secretary Baroness Nicky Morgan. “High-risk vendors never have been and never will be in our most sensitive networks.”

Morgan is not 100% correct in this statement. The EE core network is Huawei equipment, and under the guidelines provided by the National Cyber Security Centre (NCSC), Huawei would likely fall under the definition of a ‘high-risk vendor’. Either that, or the Government has and does not consider EE’s 4G network that important.

“The government has reviewed the supply chain for telecoms networks and concluded today it is necessary to have tight restrictions on the presence of high-risk vendors,” Morgan continued.

“This is a UK-specific solution for UK-specific reasons and the decision deals with the challenges we face right now. It not only paves the way for secure and resilient networks, with our sovereignty over data protected, but it also builds on our strategy to develop a diversity of suppliers.”

More to follow…

UK MP lets rip on Huawei as US Senator wants to fund ‘alternative’

Tom Tugendhat, the MP for Tonbridge and Malling, has become on of the few UK politicians to publicly state an opinion on Huawei, condemning the firm though tweets and interviews.

While the Supply Chain Review to decide the future of Huawei in the UK has been a highly publicised saga, few UK politicians have stepped-forward to add their own thoughts to the debate. Tugendhat seems to be breaking rank, risking a feud with Prime Minister Boris Johnson with his thoughts.

“Allowing Huawei to run the UK’s 5G network is a staggeringly bad idea. Nesting a dragon in our central nervous system will cost us for decades and leave us hostage to a hostile state,” Tugendhat said on Twitter.

As the Chairman of the Foreign Affairs Select Committee during the last Parliament, Tugendhat certainly is in an interesting position. He is an influential MP, though breaking the silence which has generally been upheld across the political arena, he might find retaining this prominent stance difficult. The statements made on Twitter, and also to Sky News, are somewhat contrary to the Prime Minister.

“Of course, you can individually guard every chicken, but isn’t it better not to let the fox into the hen house in the first place?” Tugendhat said.

This statement is directed toward the verification and validation work which is done by GCHQ in the Huawei Cyber Security Evaluation Centre (HCSEC). From Tugendhat’s perspective, the work to include Huawei’s equipment does not justify the outcome. There is some sanity to his thoughts, but the point of the HCSEC is to ensure telcos have access to be best technologies and an appropriate level of competition is maintained.

Tugendhat is one of the few taking to the soap box to weigh into the debate, though he does seem to be standing in opposition to Prime Minister Johnson.

“The British public deserve to have access to the best possible technology,” Johnson said on Tuesday (14 January). “If people oppose one brand or another, then they have to tell us what’s the alternative.”

Johnson does seem to be hinting he will side with Huawei and against the White House. The alternatives are few and far between, though the Democrat Senator for Virginia, Mark Warner, has introduced a new bill to Congress which could do so.

The Utilizing Strategic Allied (USA) Telecommunications Act, aims to provide $1 billion to create Western-based alternatives to Chinese equipment providers Huawei and ZTE. The idea has been raised before in the states, but an OpenRAN approach to network deployment would open-up the market to a flood of alternative, niche, solution providers. Or at least in theory.

“Every month that the U.S. does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while U.S. and Western companies and workers lose out on market share and jobs,” Warner said.

“It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose.

“We need to move beyond observing the problem to providing alternatives for U.S. and foreign network operators.”

While this sounds like an attractive move for the ecosystem, realistically it is not an alternative for Huawei and ZTE.

The concept of OpenRAN is not new and it is only just gaining traction in the industry. Vodafone, MTN and Sprint are testing out new ideas, it is still not a viable, scaled alternative to the status quo. It would most likely take years of R&D to get OpenRAN to a point where it can be used as the foundation of a network.

Are the UK, Germany, Italy, Spain and the dozens of other countries who want to work with Huawei supposed to wait for this dream to become a reality? Warner’s idea sounds nice, but it is not an alternative because investments needs to be made today.

Huawei conundrum starts heating up (again)

In among the trade war rhetoric, 5G launch announcements, privacy scandals and smartphone rumours, the UK is also supposed to be making a decision on the fate of Huawei.

Despite the Supply Chain Review being one of the most critical decisions in recent history of the UK’s telecommunications industry, it seems to have become background noise as the Government has become so well-practiced at kicking the can. However, the debate is rearing its head once again as US diplomats are in town for a lobby mission and the MI5 declares it isn’t that worried about the threat of US intelligence starvation.

“Perhaps the thing that needs more focus and more discussion is how do we get to a future where there’s a wider range of competition and a wider range of sovereign choices than defaulting to a yes or no about Chinese technology,” said Sir Andrew Parker, Director General of the MI5, the UK’s domestic counter-intelligence agency.

Sir Parker was surprisingly upbeat about the situation, despite the threats moving from chest-beating to a paper trail.

Last week, the Republican Senator for Arkansas, Tom Cotton, presented a new bill to Congress which would officially ban the US from sharing intelligence with any country which had Huawei components or equipment in telecommunications infrastructure. Should this bill pass into law, this would no-longer be considered an idle threat, but a piece of legislation the US Government would (theoretically) be forced to obey.

But speaking to the Financial Times, Sir Parker has said he does not feel there would be any reason the data-sharing relationship between the US and UK would be in jeopardy. The intelligence chief believes relationships between the ‘Five Eyes’ nations are the strongest ever, and this is not going to change in the near future.

That said, it is difficult to understand where Sir Parker’s optimism originates. Perhaps he assumes the bill will not pass to law, or there is some clause in US law which would supersede the bill? Or perhaps the intelligence community will just revert to back channels and secretive communications? As you can see from the extract below, the bill does not leave a lot of wiggle room.

“(a) PROHIBITION – Intelligence of or under the control of the United States, including intelligence products of the intelligence community, may not be shared with any country that permits operation within its national borders of fifth generation (5G) telecommunications technology of Huawei Technologies Co. Ltd.”

The above text is quoted directly from the bill introduced to Congress by Senator Cotton last week. It is very explicit and does not leave much (or any) room for interpretation.

Sir Parker seems to be leaning on the idea that everything will be fine as long as Huawei is excluding from the network core, though there is no evidence to support the US would agree to this state of affairs. The US does not seem to buy into the idea that risk can be mitigated by separating the network into dumb (radio and transmission) and intelligent (core) segments. This is a popular idea in the UK, which has gained traction in the industry.

Alongside Sir Parker’s comments, a US delegation is currently in London to hold discussions with Prime Minister Boris Johnson and senior officials on the future of Huawei in the UK. As with other visits from US representatives, this delegation is very much likely to be pushing for a complete ban.

The US stance in this equation is not very difficult to guess, but when the UK might actually say something material is. Some are expecting a decision on whether the telcos can buy components and equipment from Huawei will be made this month, though considering the track record, it is perhaps just as likely to see another delay.

After being debated for what seems like years, the UK telco industry is no clearer on what the outcome will be. After Matt Hancock was replaced by Jeremy Wright as the Secretary of State for Digital, Culture, Media and Sport (DCMS), Wright decided to delay any decision as there was a change of leadership in Downing Street. Once Johnson had settled in as PM, the decision was again delayed due to the General Election in December.

The current Secretary of State for DCMS Nicky Morgan complicated matters by stating she would no-longer be standing as an MP at the General Election, but the decision to make her a Life Peer allowed her to continue leading the department.

The current political landscape is a mess, largely thanks to the B-word. It does appear that there might be a decision in the immediate future, though we are just as likely to be waiting until the summer. That will certainly be getting the telcos a bit twitchy.

UK Government delays Huawei 5G decision once again

The UK Government has announced the decision on whether Chinese vendor Huawei has a place in the UK digital economy will be delayed until after the General Election in December 12.

Once again, politicians are refusing to make a decision, putting the progress of the UK towards the much-heralded digital economy at risk. During the summer, former-Digital Secretary Jeremy Wright kicked the can due to the Prime Minister change-over, though now it has been confirmed the industry will remain in purgatory, with the earliest decision likely to be in the New Year following the General Election.

“The Foreign Affairs Committee has been investigating the way the autocratic states intervene in democracies,” said Chair of Foreign Affairs Committee, Tom Tugendhat.

“Many members have been concerned about the Chinese technological dominance, nowhere more than in the 5G market. I wrote to the DCMS secretary to ensure that no decision would be made in the tail end of the government.

“I’m pleased to hear that a decision that could nest a hostile state’s technology deep in the central nervous system of the UK communications network will be taken by a new administration after a full debate.”

Although it has taken some time to bed in, it does appear US pressure is paying off. Tugendhat referenced the relationship with allies in the ‘Five Eyes’ partnership as one of the reasons for the delay. The US and Australia have taken official positions to ban Huawei, and it does appear the UK Government is concerned with future trade relationships, with Brexit of course a consideration.

With the US still determined the presence of Huawei equipment in an ally’s network could enable the Chinese Government to spy on it, the UK is seemingly wary of negatively impacting future relationships following the divorce from Europe.

For the telcos, this is a slow-brewing nightmare. After taking an aggressive position with one of the first 5G deployments worldwide, the telcos are being forced into a slow-down from Parliamentary inaction. There are of course numerous different factors to consider, however due to parallel developments, all largely Brexit related, it seems little attention has been paid to the Huawei decision.

None of the telcos will be happy with this situation, as uncertainly is the enemy of progress, though Vodafone and Three will be particularly irked. Both have factored Huawei into 5G deployments considerably and little progress can be made while Huawei lurks precariously next to the executioner’s block.

Unfortunately for those who were confident the UK might take a prominent position in the global digital economy, such distractions and uncertainty will come as a dampener. Other nations are flying towards the 5G dream, and potentially the economic boost which comes with the enablement of next-generation products, services and business models, though the UK can only sit and watch while this decision is dragged out.

The next Government will have the task of making the decision, though with Brexit still far from resolved, we’re not too sure when Tugendhat believes politicians are going to have a chance to discuss the Supply Chain Review and the fate of Huawei. January is likely to be the earliest point when a decision can be made, though it would surprise few is this state of unknowing drags on further into 2020.

Other countries have made a concrete decision on Huawei, Norway turned-down the prospect of a ban in recent weeks, though the pale imitation of political leadership in the UK is ruining any opportunity to build on a promising start for 5G. We would like to be optimistic and say two months is not that long to wait, though we are getting the feeling we will be saying the same thing in 2020.

US security concerns rubbished by industry and academic feedback

If you thought the UK’s Supply Chain Review was coming to an end, think again as policy makers have been given more food for thought as part of the 5G infrastructure and national security inquiry.

Entitled ‘Ensuring access to ‘safe’ technology’, Parliament’s Joint Committee on the National Security Strategy has opened itself up to public comment. Although it comes as little surprise, the feedback is relatively consistent; let the industry work with Huawei and take a risk-based approach to managing infrastructure and networks.

For those looking across the Atlantic, there might be some hurt feelings. Business and academics from across the UK have largely panned concerns, albeit in very polite wording, suggesting that while there are security standards and regulations to ponder, the US rhetoric is largely not supported by evidence and undermined by its own actions.

Submitted to the inquiry mid-way through last week, the team at Oxford Information Labs makes a very valid point regarding Huawei’s entry onto the Entity List:

“The ban was immediately suspended for 90 days, and that suspension was continued for a further 90 days in August 2019, casting doubt on whether Huawei really did represent an immediate ‘national emergency’ as originally claimed.”

Many might have contemplated this opinion, but few have vocalised it. If Huawei is such a threat to US citizens and business, why has the US Government so easily allowed it to continue to do business within its borders? If the White House propaganda is to be believed, Huawei should be erased from the Land of the Free, though the US Government has continued to validate its presence through the two exemption periods.

There is of course the damage to US businesses to take into account but suspending the enforcement of the ban does undermine the insistence that Huawei is the tip of the Chinese sword.

Another point to consider, which is constantly overlooked, is the depth of evidence to support the wild claims of the White House.

“The US Congress has a long history of making accusations against Huawei, though it has never produced any technical evidence to show that it has undermined the security of its network equipment or that it has impaired the performance of or shutdown networks using its equipment,” said Ewan Sutherland, a telecommunications policy expert from the University of the Witwatersrand.

From a personal perspective, your correspondent feels this is an element of the saga which should be taken very seriously. Due to market consolidation and the intensive R&D demands of 5G, there are already few suppliers for the telcos to consider. If one or two of the major players are to be removed from the supply chain, this is a significant decision to make. Evidence should be at the heart of these actions.

This is an element of the debate which everyone should take into account. Huawei has no material presence in US networks, aside from working with a small number of regionalised players. The US does not have to take an evidence-based approach to banning Huawei, as there is little consequence. Other nations, who have existing relationships with Huawei, must take a much more contemplative approach as there are much more serious implications.

The call for Huawei to be managed as opposed to banned is one which has echoed out of the offices for some time. Vodafone has consistently called for a risk-based approach to procurement, while Three in its evidence to the inquiry has demanded the delay to deployment be minimised. This would appear to be the rational approach, though the UK Government does seem hard-pressed to support it.

This is where the telecommunications industry has backed itself into a corner. In the pursuit of a more cost-efficient supply chain, consolidation has been rife. Alcatel, Lucent, Motorola and Nortel were all victims of the consolidation trends, streamlining the number of suppliers who can offer services to the telcos at scale. Telcos now have to look at Chinese vendors to ensure there is competition.

In an ideal world, the UK or US Government might be able to point to a domestic supplier and suggest more products and services are sourced there. This would allow the Government to have more of a handle on development requirements, and despite the suggestion of a new player emerging, this is unlikely to have any material impact on 5G.

“Perhaps, the United States will push or support the creation of a new manufacturer of RAN, though it would need to be for 6G or 7G, rather than 5G,” said Sutherland.

The likes of Huawei, ZTE, Ericsson and Nokia have been investing in 5G R&D for close to a decade and have already begun 6G investigations. What chance would a new, standalone player have in penetrating this market within the next 10-15 years?

Looking through all the submissions, there seems to be a consensus. There are only three network vendors who can realistically support rapid 5G network deployment at scale, and Huawei happens to be one of them.

Regulators do need to have a much more considered approach to acquisition and mergers in the future, if not for any other reason as to avoid the bureaucratic congestion which we are seeing through this entire Supply Chain Review process.

Another interesting takeaway from the evidence which has been presented, is the desire to remain closely aligned with Europe following Brexit. This should not be considered new either, though perhaps this could build a bridge to repair the damage done by posturing politicians during the Brexit negotiations. Let’s not forget, Europe is the UK’s largest trading partner, and this will not change any time soon; relationships will have to be re-forged following the divorce.

Last week, the European Commission collated all responses from member states into a white paper which said very little which was not already known. 5G presents more of a security threat than generations prior, while state-sponsored attacks are becoming more of a risk. While this might have been seen as busywork, it was a necessary step in the bureaucratic maze to getting something done.

Over the coming months, member states will submit more evidence and recommendations to create what could become a pan-European approach to mitigating risk and rolling out 5G networks. What the submissions are suggesting to the UK Government is that any future proposals on the Isles align as closely as possible to what our European cousins are suggesting. Not only does this provide international consistency, it is a sign of good faith for future trade and political relationships.

Although this is not the end to the protracted evaluation of Huawei and the role of Chinese vendors in the UK network infrastructure segment, it does paint a very strong case for inclusion.

Europe has proven to be a key battle ground in the increasingly fraught conflict between the US and China, and few companies are more exposed to the risk as Huawei. This is a vendor which captures billions in profit in its domestic market, as well as across Asia, though Europe contains a significant number of very prominent customers. However, the trends do seem to be heading the right direction.

Germany has recently said it would not legislate Huawei out of the country, Italy signed a Belt and Road Initiative deal with China in March 2019, Belgium has conducted its own review without consequence to the vendor, while France and the Czech Republic have given warnings but not definitive action. While it is still anyone’s best guess, the UK looks like it is heading towards a risk-based position, potentially enforcing a multi-vendor approach to procurement.

Of course, while logic and behaviour suggest this is the most likely outcome, there is a lot which can go wrong. The UK will have to balance up the impact on existing and potential relationships, especially its standing in the valuable Five Eyes intelligence community.

At some point in the future, the Government is going to have to make a decision. The prolonged review of the supply chain does not sit beside political ambitions for a rapid rollout of 5G or the accelerated timeline for a full-fibre nation. The longer this review takes, the less likely it is the UK will be a major player in the digital economy.

The fourth-round bell has rung and Huawei is still standing in the UK, just

In the UK Supply Chain Review, Huawei is battered and bruised entering the fifth round, but the UK Government still isn’t telling us whether Huawei is going down in the fifth or not.

Speaking to BBC Radio Four this morning, Secretary of State for Digital, Culture, Media and Sport Nicky Morgan said a decision could be made in the autumn, painting a picture with about as much colour as a 1930s TV set.

“I would hope that we could do something by the autumn, but we want to make the right decision and we’ve got to make sure that this is going to be a decision for the long term, making sure we keep all our networks secure,” Morgan said.

In short, Morgan is pretty much in the same position as her predecessor Jeremy Wright; the only thing to report is a further stall to a decision.

It is becoming a bit tedious to constantly be discussing delaying tactics and indecision from the UK Government, but you also have to feel for the telcos. These are companies which are being asked to spend billions on network infrastructure to lead the UK into the digital economy and a secure future, but they are not being helped by the Government.

It is of course important to get this decision right, but sooner or later someone will have to make one. Like everyone else involved with the Huawei saga, Morgan is kicking the can down the road, seemingly hoping someone else will step in and decide, shielding the politician from the court of public opinion. That said, Huawei still remains chipper.

“We welcome the Secretary of State Nicky Morgan’s commitment to the development of world-class digital infrastructure that will help the UK continue to ‘compete and grow in the global economy’,” a Huawei spokesperson said.

“Over the last 18 years, we have helped build the UK’s broadband, 3G and 4G networks and, as independent analysts agree, Huawei can help British operators develop 5G networks that are more secure, more affordable and completed more quickly – helping to keep bills down for consumers and connect rural areas.

“Huawei continues to work with network operators to rollout 5G across Britain and many other countries globally to help improve their economies and we look forward to the UK Government’s decision in the autumn on our future involvement here.”

There are of course numerous distractions for politicians. Brexit is still grabbing headlines, everyone wants to keep BoJo, the new boss, happy, Opposition Leader Jeremy Corbyn is causing chaos once again and egos need to be stroked on the other side of the Atlantic to ensure a profitable relationship can continue.

The status quo is one of indecision and it is not working. The UK has created a leadership position heading towards the glory lands of the 5G era, but this can only be maintained if work is allowed to progress. And for work to progress, the UK telcos need a firm and absolute decision.

Zed’s dead, but we still don’t know about Huawei.