When it comes to the use of Chinese networking equipment within UK telcos, it would seem the nation believes it can handle one provider, but not two.
According to Financial Times, the UK National Cyber Security Centre (NCSC) has sent a letter to telcos, Ofcom, and ZTE stating that the use of equipment from the Chinese manufacturer would create national security risks that "could not be mitigated effectively or practicably".
Warning that protecting a network from a malicious equipment depends on using other vendors that are not as risky, the NCSC said the risk of both Huawei and ZTE was too much.
"Adding in new equipment and services from another Chinese supplier would render our existing mitigations ineffective," FT reported.
In the UK, Huawei is a major supplier of networking equipment for fixed and wireless networks and is involved in 5G trials and Internet of Things (IoT) research. The government makes use of the Huawei Cyber Security Evaluation Centre to evaluate the security of Huawei products used within the country's telco networks. In February, the company announced plans to spend £3bn in the UK over the next five years.
For ZTE, it has been a rough 24 hours, with the United States government hitting the company with a US export ban.
The US Department of Commerce said ZTE lied to the Bureau of Industry and Security about disciplinary actions supposedly enforced on senior employees relating to the illegal shipments, and paid full bonuses to employees who had engaged in illegal conduct.
"ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored," US Secretary of Commerce Wilbur Ross said.
The ban prevents US companies from selling components to ZTE.
In March 2017, ZTE had been fined $1.2 billion by the United States for directly, or through third-party distributors, shipping $32 million worth of products containing American-made equipment to Iran between 2010 and 2016 without the proper licensing.
ZTE was similarly the subject of a 2012 investigation by the FBI and US Commerce Department after allegedly setting up a network of sub-companies to illegally export Microsoft, HP, Oracle, Dell, Cisco, and Symantec products to Iran.
In February, the heads of the CIA, FBI, NSA, and the director of national intelligence to the Senate Intelligence Committee also recommended that Americans not use products from Huawei and ZTE.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Christopher Wray said at the time.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure. It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
The restrictions ban US companies from selling hardware and equipment to China's ZTE.
Without a set of fines to pay, the Chinese networking giant returned to posting more than 4 billion yuan of profit for the full year.
ZTE has said that it will launch 5G devices in either late 2018 or early 2019, with smartphones, tablets, and customer premises equipment already under development.
US intelligence service leaders have repeated claims of Huawei collaborating with the Chinese government since 2012, but have provided no evidence.
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