In 2018, Huawei became the world’s largest equipment manufacturer and second largest smartphone manufacturer. Its success, and ten years of innovation and growth, have recently been marred by the considerable pressure being placed on US allies to ban Huawei equipment in core telecoms networks.
Once a staunch supporter of Huawei, the UK government is now conducting a review, expected to be completed in March 2019, to assess whether Huawei infrastructure should be removed from the UK’s networks, amid security fears. It is uncertain, however, if the review itself will ever be published when completed.
A number of countries – including Australia, Canada, Czech Republic, France, Germany, Japan, New Zealand and the US – are reviewing their use of Chinese equipment, or have already taken steps to limit purchases of network equipment from Huawei and ZTE – despite repeated denials from Huawei that it allows spying by the Chinese government. Major operators, such as Orange and DT, have unilaterally conducted reviews of Huawei equipment, although DT has stated that if it is forced to rip out Huawei equipment this could delay rollout of new services by as much as 24-36 months.
Despite Huawei’s strong denials it is doing anything wrong, its two flagship British customers – BT and Vodafone – have already begun the process of planning what to do if the UK government mandates a restriction on Huawei equipment.
BT has a long-term relationship with Huawei, and has said that it is confident in the controls it has to maintain security. Nevertheless it has plans in case restrictions are mandated. Departing CEO, Gavin Patterson said in a recent conference call with investors: “…we have plans to manage both the financial and logistical implications of a range of scenarios coming out [of this review].”
BT has already removed Huawei equipment from the new Emergency Service Network (ESN), a £2.3 billion project set to deliver communications systems to the UK police and emergency services. The project is intended to update Airwave, a Motorola system, by giving emergency services secure access to EE’s 4G network. The project is already overrunning, such that the government has now extended use of Airwave until 2022.
Vodafone has ‘paused’ the use of Huawei equipment in its core networks in Europe. The company has said that if it needed to replace Huawei equipment in its core this would not be costly or disruptive, but that if it had to replace the company’s equipment in the RAN then the impact would be huge.
Meanwhile, some operators – such as Swisscom – have been sanguine about the review of Chinese network equipment and software. “We are not completely blind when we operate the networks. We constantly monitor them and see what happens on the networks”, said Swisscom’s CEO Urs Schaeppi. “Today we have no indication that espionage is being operated on the networks.”
The EU itself has now weighed into the situation, with Reuters reporting that Germany is considering mandating a de facto ban on Huawei 5G equipment. Meanwhile, Reuters reports that the GSMA Director General, Mats Granryd, has proposed putting the Huawei debate on the agenda for its next board meeting.
Irrespective of the outcome, the debacle highlights two important points:
- increasing connectedness means data security is now more important than ever;
- networks are not simply commercial assets, but strategic national infrastructure that must be protected at all costs.
This latter point speaks loudly once again for the separation of the network and services layer, so that investment in the network layer is performed at a national level in order to keep our economy competitive. Whether we can rely on commercial businesses to invest as rapidly and fully as the UK economy needs in order to remain competitive against other connected nations is now a topic that is rising up the agenda.