The UK has decided to ban Chinese tech giant Huawei from its 5G network, doing a turnabout on its January decision to grant it a limited role.
On Tuesday, the UK government changed its policy and announced the ban on Huawei from its 5G network. It instructed operators, including BT and Vodafone, to remove existing Huawei equipment from their 5G networks until 2027.
Digital and Culture Minister Oliver Dowden explained that the new US sanctions imposed on the company in May had "significantly changed" the landscape.
Dowden said: "Given the uncertainty this creates around Huawei's supply chain, the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment."
Role of US sanctions
The UK's decision to ban Huawei may be considered a big win for the US, particularly President Donald Trump's administration, as it has been pushing allies to exclude Huawei from their 5G networks.
According to Defence Secretary Ben Wallace, the US sanctions, which will come into effect in September, had specifically been designed to force the UK to reconsider Huawei.
Wallace explained: "It is a better set of sanctions than the earlier set, and it’s specifically clearly designed in a smarter way to put countries that have high-risk vendors – specifically Huawei – under greater pressure."
Under the sanctions, Huawei and the third parties that manufacture its chips are prohibited from using “US technology and software to design and manufacture” its products.
As a result, the Chinese telecoms firm could lose access to software it relies on to design and test its processors, as well as well as the ability to produce its most advanced chips.
The US government has cited national security concerns as the basis for the sanctions. US officials have been suggesting that the Chinese government might use Huawei to spy on or even sabotage communications.
Impact on Huawei
The ban will have a dramatic effect on the business of Huawei as it has been operating in the UK for 20 years and Europe is one of its key markets, accounting for 24% of sales last year.
On Monday, the Chinese tech company announced its half year results earlier than usual, reporting slower revenue growth. Since the US blocked its access to Google apps, Huawei's phones have experienced lower sales and became less attractive to markets outside China.
While the company claimed that the recent US sanctions would not have affected "the resilience or security" of its products, it expressed disappointment toward's the UK's decision.
Ed Brewster, a spokesperson for Huawei UK, said: "It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide. Regrettably our future in the UK has become politicized, this is about US trade policy and not security."
In response to the 5G network ban, Chinese ambassador Liu Xiaoming tweeted: "Disappointing and wrong decision by the UK on Huawei. It has become questionable whether the UK can provide an open, fair and non-discriminatory business environment for companies from other countries."
China's foreign ministry spokesperson Zhao Lijian stated: "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."
