Above: Victor Zhang.
The UK has decided to stop doing business with Huawei for 5G connectivity and plans to remove the company’s equipment from its existing networks.
In January UK Prime Minister Boris Johnson cleared Huawei to participate in the country’s 5G rollout with some restrictions but met with some opposition from politicians in the US and UK.
Today, the UK banned mobile providers from buying new Huawei 5G equipment after December 31, 2020 and must remove all the company’s 5G equipment from their networks by 2027.
The move will have an immediate chilling effect on Huawei’s sales in the territory and cost the UK billions in removal and replacement costs.
The decision is also expected to delay implementation of the 5G broadband transmission protocol by at least a year.
The move was saluted by US Secretary of State Mike Pompeo who tweeted “Today’s decision by the UK to ban Huawei from its 5G networks advances Transatlantic security in the #5G era while protecting citizens’ privacy, national security, and free-world values.”
The ban followed statements by Huawei Vice President Victor Zhang in a press release on the matter in which Zhang “urged the UK Government to take a cautious, evidence-based approach to any changes in its policy towards Huawei.”
He also warned that restrictions on the company’s operations in the country could slow down the Government’s post-Covid vision for the UK and its goal for 5G broadband access for all by 2025.
That prediction seems set to become a reality, but at a significant cost to Huawei.
In a response to the decision, Edward Brewster, Spokesperson for Huawei UK issued a statement which noted that, “Regrettably our future in the UK has become politicized, this is about US trade policy and not security.”
“We will conduct a detailed review of what today’s announcement means for our business here and will work with the UK government to explain how we can continue to contribute to a better connected Britain.”
Huawei last week announced its financial results for the first half of 2020. The company generated CNY454 billion (roughly TT$439 billion) in revenue during this period, a 13.1% increase year-on-year, with a net profit margin of 9.2%.
In that statement, Huawei promised “to continue fulfilling its obligations to customers and suppliers, and to survive, forge ahead, and contribute to the global digital economy and technological development, no matter what future challenges the company faces.”