What you need to know
- The latest blow to Huawei's smartphone business sees the UK banning its equipment in the country.
- British officials introduced a new measure to help fund the transition, which will focus on security and vendor compatibility.
- Carriers will no longer be allowed to purchase equipment from Huawei starting January 2021.
Huawei can't catch a break. In the latest development of the ongoing troubles for the company, the UK has pushed a measure that will see Huawei's equipment removed from its mobile networks by 2027, despite pleas from the company to reconsider.
Starting January 2021, the UK will no longer allow mobile carriers to purchase equipment from Huawei, and can no longer install equipment starting September 2021. The measure sees Britain's government joining the U.S. in its stance to squeeze Huawei out of the picture, due to concerns over security. Previously, Huawei was granted limited functionality with UK mobile network infrastructure, a decision which has now been reneged amid increasing pressure from the U.S. on Huawei's supply chain.
Huawei has stated that moving to ban the company would only delay the U.K. by several years in its deployment of 5G, and that the country has already determined that any potential risks with using their equipment are manageable.
"The decision is going to have a huge economic impact on the UK."
As part of the measure, British officials are allotting ₤250 million ($333 million) towards diversifying the country's own supply chain. The measure will fund a National Telecoms Lab, which focus on security, compatibility, and lowering the barriers of entry for new potential suppliers. This could also mean good news for the likes of Ericsson and Nokia, the latter of which has been struggling to win 5G contracts amid a slew of corporate shakeups.
This past May, tensions between Huawei and the U.S. seemed to come to a head when sanctions were tightened, and the chip makers were barred from doing business with Huawei unless given a license. This affected their business with TSMC, which could at that point no longer take orders from to produce Kirin chips for Huawei's flagship smartphones. Recently, Qualcomm was granted permission to resume business with Huawei, but only for the sale of 4G-related technology, further stressing Huawei's already dwindling supply of 5G chips.
The UK expects the ban to be fully complete by 2027. For now, telecoms will be allowed to use existing Huawei equipment until the transition is complete.