Inside the talks to end the UK’s reliance on Huawei

At the start of the year, before coronavirus swept across the country, politicians had a very different crisis on their hands. Boris Johnson announced he was allowing Chinese firm Huawei to build part of the UK’s 5G network – and Donald Trump was furious.

The US view was that it was “like allowing the KGB to build [Britain’s] telephone network during the Cold War”, Republican allies said at the time. Trump was reportedly “apoplectic” on the line to Johnson, having been pushing for the UK to change tack for months to no avail.

But, now, months later, things are changing. The Government appears to be setting the groundwork for Huawei to be stripped out sooner than expected.

Ministers are understood to have held talks over funneling taxpayer cash into an international scheme to standardise 5G network equipment, known as OpenRAN, that is backed by BT, Vodafone and tech giants including Facebook.

Sources also told The Telegraph there are early talks over compensating telecom operators for having to swap out Huawei equipment earlier than planned. 

All this stems from a new emergency review launched into Huawei. Within weeks GCHQ branch the National Cyber Security Centre will report on how fresh US sanctions over semiconductors will affect the Chinese giant. 

In practical terms, the restrictions stopping US parts being used in semiconductors for Huawei are likely to hurt the company’s handset business more than its network equipment arm.

But there could be concerns over the equipment no longer being “good enough because Huawei cannot access the best technology to make it happen,” says Janardan Menon, an analyst at Liberum, and others over what will happen to its supply chain. 

He says the decision to launch such a review seems more political. “The US is ratcheting up pressure on European governments to try to end their relationships with Huawei as well. What we’re seeing from the UK Government is probably more a reflection of that than what is happening on the chip level.”

It is a view shared by many. Speculation is swirling that Britain is preparing to make a sharp u-turn on its earlier decision over Huawei. Johnson may have given the company the green light, albeit with a cap on market share. Telecoms firms expected able to use the Chinese vendor, as they had when building Britain’s 4G networks, for the fifth generation of mobile networks, 5G, that will offer faster speeds and greater capacity.

But now “there’s a growing resignation” that Huawei will not be allowed as big a role as was previously suggested, one industry source said. “It’s just a matter of what the timeline will be.”

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