Brexit: The United Kingdom Bans Huawei From Its 5G Network

The United Kingdom has decided to withdraw from the European Union, BREXIT, and has begun the process since March 2017.

However, Britain has decided to ban Huawei from her 5G telecom network. The UK government announced this decision on the 14th of July, 2020, that operators such as BT (BTGOF) and Vodafone (VOD) are given till 2027 to remove existing Huawei equipment from their 5G network.

Digital and Culture Minister, Oliver Dowden said new US sanctions imposed on the company in May had significantly changed the landscape.

“Given the uncertainty, this creates around Huawei’s supply chain,” he continued. “the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment.”

The decision to ban Huawei from her 5G telecom network, would tear up a 20-years partnership with the Chinese company and could damage a multi-billion dollar investment with China.

China’s ambassador to the UK, Liu Xiaoming, in response to the decision said during a press conference, “The way you are treating Huawei will be followed closely by other Chinese businesses. The mutual trust was undermined. It will be tough for businesses to have the confidence to have more investment.”

Moreover, UK Prime Minister, Boris Johnson had faced pressure from the British lawmakers alongside the Trump administration, which argues that the Chinese government could use Huawei for spying and even sabotage. Also, revealing that according to Chinese law, Chinese companies can be ordered to act under the direction of Beijing, but Huawei has denied that the company wouldn’t help the Chinese government to spy.

Furthermore, for the Donald Trump administration, Britain’s decision was a big win. His administration has been in support of excluding Huawei from 5G telecom networks.

United States sanctions in May furthered reduced Huawei’s ability to produce and obtain semi-conductors chips using American-made technology, making the United State’s campaign against Huawei successful.

The US’ sanction made UK security review Huawei’s involvement in the British network, which led to the removal of the company from her 5G telecom network.

The decision has made Huawei experience a decline in its sales and less attractive to people in the market after Washington blocked the company from accessing Google apps.

Huawei said the company was confident that the recent US sanctions would not have affected the resilience or security of its products and declared the UK’s announcement as a disappointing decision.

“It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide,” said Ed Brewster, a spokesperson for Huawei UK. “Regrettably, our future in the UK has become politicized. This is about US trade policy and not security.”

The foreign ministry spokesperson Zhao Lijian said before the UK announcement on July, 14, “Whether the UK can provide an open, fair and non-discriminatory business environment for Chinese companies … is a litmus test for British markets after Brexit, and it is also an indicator for China’s investment in the UK.”

Huawei has invested a lot in Britain’s telecommunication and launched a different advertising campaign for its investments and job creation. Last month, Huawei received approval to build a sprawling $1.25 billion research facility in Cambridge.

Moreover, other rivals said they were ready to fill the 5G void left by Huawei.

Nokia said that the company has the “capacity and expertise to replace all of the Huawei equipment in the UK’s networks at scale and speed.”

Arun Bansal, Europe and Latin America president for Ericsson (ERIC) said that the Swedish company “has the technology, experience, and supply chain capacity,” to help the United Kingdom reach its 5G goals.

Moreso, the UK will pay the price for removing Huawei from her telecom network. The government said that the cumulative delay to 5G networks from the ban on new Huawei equipment and replacing its existing technology would be two or three years, at a total cost of as much as £2.5 billion ($3.1 billion).