Photo: Kin Cheung ((AP)

UK telecoms aren’t taking warnings from U.S. intelligence agencies that telecommunications gear produced by Chinese tech giant Huawei could pose a security risk incredibly seriously, at least according to a report from the Observer, which reported on Saturday that all four major carriers in the country are currently or are planning on using Huawei networking gear for their rollout of next-generation 5G technology.

The Observer reports that it is believed Huawei only has contracts for “non-core” parts of networks. That more or less matches up with reported UK government policy allowing the use of its technology in certain situations, though a final determination of what Huawei gear will or won’t be allowed has yet to materialize. The paper wrote that Huawei is already working on parts of Vodafone 5G networks and assisting in “hundreds of 5G sites for EE,” and has contracts to work with Three and O2, amid concern that an all-out ban on Huawei tech would greatly stall 5G deployment:

The Observer understands that Huawei is already involved in building 5G networks in six of the seven cities in the UK where Vodafone has gone live. It is also helping build hundreds of 5G sites for EE, and has won 5G contracts to build networks for Three and O2 when they go live.

The decision to use Huawei in the “non-core” parts of their networks – chiefly the radio systems allowing wireless communication – is a gamble for UK telecom operators. They may be left counting the cost if the government bans the Chinese company from any involvement with 5G.

The consultancy Assembly suggests a partial to full restriction on Huawei could result in an 18-to-24-month delay to the widespread availability of 5G in the UK. The UK would then fail to become a world leader in 5G – a key government target – costing the economy between £4.5bn and £6.8bn.

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In the past few months, U.S. intelligence agencies—albeit without releasing any hard evidence and amid a brewing U.S.-China trade war—have accused Huawei of being a potential proxy for Chinese military and state security agencies to conduct foreign espionage. Huawei, the world’s largest telecom gear manufacturer, has all but been kicked out of the U.S. as a result. Its additional problems stateside include charges of trade theft and fraud and a separate effort to extradite its chief financial officer Meng Wanzhou to the U.S. from Canada on allegations of banking fraud and Iran sanctions violations.

Said intelligence agencies have also upped the pressure on allies, with the CIA allegedly telling other members of the “Five Eyes” intelligence alliance (a joint signals, military, and human intelligence-sharing arrangement between Australia, Canada, New Zealand, the U.S., and the UK) that Huawei is funded in part by the Chinese military. At one point, U.S. Ambassador to Germany Richard A. Grenell reportedly wrote a letter to the German economic minister threatening to lessen security cooperation if Germany did not restrict Huawei gear.

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The Commerce Department has added Huawei to a so-called “entity list” restricting its access to U.S. technology without government permission, though Trump recently issued a vague statement suggesting that may be rolled back as part of trade negotiations.

Some senior UK officials share the security concerns, the Observer wrote, including a defense secretary who was fired under suspicion of leaking related documents. But not all U.S. allies are on board, with some in the UK government reluctant to bar the company because it could set back 5G:

Whitehall officials are concerned that excluding Huawei, one of the very few companies that can provide next-generation wireless technology, would have damaging implications for the future of the UK’s infrastructure. They have taken note of what happened last December when the O2 4G network went down for 24 hours due to problems with technology provided by the Swedish telecoms firm Ericsson.

“If we had banned Huawei and everyone was just using Ericsson, we would have had a day without any mobile coverage on any network – not a good position to be in,” said Matthew Howett at Assembly.

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According to the Observer, a government review of the use of Huawei tech in 5G networks is due to be released in Spring 2020 but “has yet to materialise as officials and ministers clash over the extent to which the Chinese company should be restricted.” Exactly what counts as core vs non-core applications remains to be clearly delineated, though apparently UK carriers are gambling on a decision that swings in their favor.

[Observer]

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