After US onslaught Huawei's future in the UK is in doubt - again. - THE BUSINESS PACKAGE


Tuesday, May 26, 2020

After US onslaught Huawei's future in the UK is in doubt - again.

After the onslaight by the United State's Donald Trump against the Chinese Telecommunication giant, the third largest in the world, reports indicate that the future of the country in the United Kingdom is also in doubt. 
The consequences could affect how quickly improved internet access is rolled out and how much it will cost. This a time when the country's economy is already in a precarious state because of the coronavirus pandemic.
The catalyst for a potential rethink is the US's move to restrict the firm's ability to buy chips, which was justified on "national security grounds".
On Sunday, the UK's National Security Centre (NCSC) confirmed it was examining what impact this would have on the UK networks that use Huawei's tech.
That sounds quite vague. But it potentially paves the way for a government U-turn.
In January, the prime minister gave the green light to continued use of the firm's tech in mobile and broadband networks, but said its its market share must be reduced.
Now he might appreciate the chance for change of mind.
It would help Boris Johnson prevent backbenchers who favour a ban from derailing his forthcoming Telecoms Infrastructure Bill.
Moreover, it offers him a way to defuse tensions with the White House, which has said continued use of Huawei will have a "dramatic impact on our ability to share [security] information".
Mr Johnson and President Trump may meet next month at a mooted G7 summit. Blocking Huawei could help secure a post-Brexit trade deal, even if it made relations with China trickier.
Image copyrightPA MEDIA
"More suppliers means greater competition, innovation and network reliability, and crucially ensures consumers have access to the best possible technology," Victor Zhang, Huawei's UK chief, told the BBC.
"Removing Huawei would seriously delay 5G, costing the British economy up to £7bn," he added, citing a study published last year by Mobile UK, a trade group that represents UK network operators.

'Time consuming'

Part of the reason mobile providers are concerned is that the current version of 5G relies on new equipment being plugged into existing 4G kit from the same vendor.
"A lot of the 4G expansion was software-upgradeable to do 5G when an extra mast antenna was fitted," explained Andrew Ferguson, editor-in-chief of the news site ThinkBroadband.
So, he added, even if a Huawei ban was limited to the newer technology, networks would still have to rip out and replace some of their older infrastructure as well.
"It's not only a very expensive process for the operators, but it's going to be a time-consuming one as well because they need to get access to all those sites to make the changes," added Matthew Howett from Assembly, the consultancy that wrote Mobile UK's report.
"And Huawei has been very innovative at coming up with the smallest and lightest 5G equipment, meaning the operators can sometimes just use a cherry picker to hook it onto existing mast infrastructure. Some of the others' is heavier and bulkier, which can require more in terms of getting planning consent and road closures."
Huawei's major 5G rivals are Nokia and Ericsson - two European firms.
The networks claim that having three providers to choose from helps them negotiate lower prices.
In many cases, they want a mix of two suppliers so that if technical problems arise with one they can fall back on the other to provide a reduced service. That doesn't always involve Huawei - O2 for instance picked Nokia and Ericsson to be its primary 5G vendors despite having trialled the Chinese firm's kit.
A study commissioned by Huawei last year claimed locking it out would increase a country's 5G investment costs by between 8% and 29% due to reduced competition.
And if mobile providers have to spend more, consumers can expect their bills to rise too.
But one MP opposed to Huawei's rollout says there are more important considerations.
"There's a free and fair competition element here, there's a security element, there's a data-privacy element, and there's a sort of geopolitics of Chinese influence as well - the influence of the Chinese Communist Party," Bob Seely, a member of the foreign affairs committee, told the BBC.
"There shouldn't on principle be high-risk vendors in the communications network."
Huawei denies it uses state subsidies to undercut its rivals, adding that it would never spy on China's behalf or otherwise deliberately compromise its clients.

Home broadband

Huawei is also a big player in fixed-line broadband.
It currently accounts for about 44% of the equipment used in providing super-fast full-fibre connections directly to homes, office and other buildings, according to UK regulator Ofcom.
BT's Openreach division aims to bring that in line with a 35% government target by using more kit from Nokia and the US firm Adtran.
But this sidesteps the fact that more properties rely on an alternative set-up in which fibre only reaches roadside cabinets, and the last leg is supplied by a copper-based connection. The reason this is relevant is that tens of thousands of the cabinets involved are Huawei's.
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"They connect directly to the core of the network," commented Mr Ferguson.
"But replacing those is a complete non-starter unless someone's going to throw many billions of pounds at it and also all the people to do the work."
While Huawei's opponents would prefer it to be gone altogether, they acknowledge this is impractical in the short term.
But Mr Seely suggested that cabinets and other such products should be swapped out for alternatives when they are "up for replacement".
One thing practically everyone agrees on is that the matter needs to be settled once and for at a time when so much else about the economy is uncertain.
"These procurement decisions can take 18 months to two years to finalise and it takes time to ramp up supply to meet the demand," said Mr Howett.
"So this isn't just a question of overnight deciding not to use Huawei - it would take many years to do it properly."

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