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After Huawei, what's next for 5G in the UK?

The UK government has announced that Huawei's equipment will be phased out of the country's 5G networks by 2027. But the next step of the plan is not all that clear.
Written by Daphne Leprince-Ringuet, Contributor

It's now official: from the end of this year, 5G deployment in the UK will happen without Huawei's equipment. After two decades providing infrastructure for the country's 2G, 3G and 4G networks, the Chinese giant has been barred from taking part in the UK's plans for next-generation connectivity. 

After the end of this year, UK mobile networks won't be allowed to buy 5G equipment from Huawei, announced the government this week, and they must remove the firm's technology from their 5G networks altogether over the next seven years. By 2027, the UK's 5G networks should effectively be Huawei-free.

The decision didn't exactly come as a surprise. The UK government has been pondering over the role that the Chinese company should have in the country's networks for months – in fact, ever since the US added Huawei to its Entity List last year, restricting the firm's access to US software and components.

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The Trump administration's suspicions that the Chinese government might be able to use Huawei's equipment to spy on foreign countries was shared by others, despite failure to provide evidence to back up the claims. Early in 2020, the UK government labeled Huawei as a high-risk vendor, leaving the company out of the sensitive "core" parts of future 5G networks, and capping the company's supply of equipment to a third for non-sensitive parts of the network.

Since then, the US has imposed new sanctions against the Chinese giant, which limit Huawei's access to products built on US semiconductor technology. With the impact that the new restrictions will have on the company's supply chain, the UK's National Cyber Security Centre (NCSC) has now decided that Huawei's technology is not safe enough to be allowed any role whatsoever in the country's 5G networks.

With Brexit looming and the need to find a new place on the international scene, the UK has had to think carefully about Huawei's fate, of which depend relations with both the US and the Chinese government. 

The US president Donald Trump, for one, welcomed the news that the UK would phase out Huawei's equipment in the next few years, and even implied that he had influenced the decision: "We convinced many countries – I did this myself for the most part – not to use Huawei because we think it's an unsafe security risk," he said. 

Of course, China did not share the Trump administration's stance. Liu Xiaoming, the Chinese ambassador to the UK, called the decision "disappointing and wrong", while Huawei's spokesperson Ed Brewster condemned what he described as a "politicized" move, which he said was "about US trade policy and not security."

As politically motivated as the UK government's decision might have been, there are other factors that explain the country's recent move against Huawei. Paolo Pescatore, analyst at PP Foresight, explains that countries should operate on a zero-trust policy anyway when it comes to selecting vendors for networks. In that respect, beyond geo-political arguments, the rationale behind the UK's announcement is reasonably clear.

"Obviously, there are tensions between the US and China when it comes to the ownership of Huawei," Pescatore tells ZDNet. "But it remains that there are fundamental concerns over security that need to be addressed. 5G opens up many new use cases, and the last thing you want is someone hacking into traffic lights and critical communications."

Making sure that 5G networks are reliable and safe is a vital national interest – particularly so when the technology is expected to support applications ranging from autonomous cars to remote surgery. It makes sense, according to Pescatore, to want to move away from a vendor that is deemed high risk in that context.

But between the theory that motivated the UK government's decision, and the pragmatic reality of removing Huawei from the country's 5G networks, there are many questions that still need answering. The first of which is: after 20 years relying on equipment provided by Huawei, how are network operators meant to move forward without the assistance of the Chinese giant?

Operators don't disclose the commercially sensitive breakdown of vendor shares for their network equipment, and it is hard to tell how prevalent exactly Huawei infrastructure is in the UK. But according to some estimates, the Chinese firm provides between 30% and 40% of the country's network equipment.

For some, this only highlights the UK's over-reliance on a single foreign supplier for critical infrastructure, and the need to develop more diverse capabilities. But for the exact same reason, others argue that a move away from Huawei will come at a huge cost. Operators will need to halt the installation of new Huawei equipment, while also removing existing kit in 4G infrastructure, which was designed to be upgraded to accommodate 5G networks. 

The process will be costly and time-consuming. Oliver Dowden, the secretary of state for digital, culture, media and sport, has already warned that the government's move will delay the rollout of 5G by two to three years and cost up to £2 billion ($2.52 billion). 

In a similar vein, Vodafone recently said that with Huawei's equipment constituting a third of the company's radio base stations, any move to remove the Chinese giant from the UK's 5G networks would cost hundreds of millions of pounds. 

Following the UK government's latest announcement, a Vodafone spokesperson said that although the company understood the complexity of the issue, it was still studying the impact of the move. 

"Obviously we are disappointed because this decision – as the government has highlighted today – will add delay to the rollout of 5G in the UK and will result in additional costs for the industry," said the company.

BT, for its part, took a measured approach. Back in January, when the UK government announced a first cap on Huawei's share of 5G equipment, BT calculated that limiting the Chinese giant's role would cost £500 million ($630 million); and the new proposals to bar Huawei, according to BT, won't cause additional costs to the original estimate.

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The reason for this is that the government has provided sufficient time for the ban to coincide with the normal lifecycle of network equipment. By 2027, it is likely that most kit will need replacing, which means that operators will be looking at investing in new infrastructure anyway. But rather than purchasing Huawei's products, they will have to look at other options.

Some analysts argue that, for this reason, the cost of phasing out Huawei from 5G networks is often over-estimated. John Strand, the director of Strand Consult, tells ZDNet: "Existing calculations don't take into consideration the fact that if equipment is more than a few years old, you need to remove it and replace it if you want to upgrade to 5G, regardless of whether you use Huawei or not."

As evidence of his observations, Strand pointed to Danish telecom provider TDC's recent move to switch from Huawei's equipment to Ericsson's to supply the company's 5G network, which has not been reported to have come at any increased cost or delays. 

Similarly, Norway's Telenor picked Ericsson to start building its future 5G networks, announcing a "full modernization" of the country's mobile networks, which is expected to last four to five years. During that time, Telenor will keep using Huawei's equipment to maintain the 4G network and ensure customers can still have access to reliable connectivity. 

Ericsson, predictably, is keen to push the narrative that a vendor swap is easier than typically thought. Christian Leon, the company's vice president and head of networks for EMEA, tells ZDNet that it is a "myth" that other vendors wouldn't be able to match Huawei's technology.

"In the telecom industry, it's common to swap equipment in and out. This has been done multiple times and happens more frequently as we introduce new technology," said Leon.  

Case in point: according to Leon, in the past two years, Ericsson has swapped-in 5G-capable equipment globally at more than double the total number of radio sites that are currently in the UK. And the company ships enough 5G-ready radios to cover the greater London area every day.

BT, in fact, is already replacing Huawei equipment with gear from Ericsson in its 4G and 5G core networks. Only a few months ago, the two companies signed a deal to deploy Ericsson's technology for core 4G, as well as standalone and non-standalone 5G.

Migrating away from Huawei, however, is not just about swapping equipment. Operators will also have to make sure they have engineers that qualify to maintain new equipment, and find ways to keep network quality to a high standard so that customer experience isn't affected.

As a result, swapping equipment will be no easy process for operators, explained Sylvain Fabre, analyst at research firm Gartner. "Operators don't like to make major changes on their production platform," Fabre tells ZDNet. 

"Their margins are very challenged, and vendor swap always has a cost," he continues. "It is a major churn and disruptive to network operations, and has the potential to affect network quality and customer experience."

And the most important failure, in this case, is likely to be the delay to the nationwide deployment of 5G that the government is anticipating as a result of the new proposals. "Gigabit Britain", which Boris Johnson's administration has pledged to make a reality by 2025, is effectively likely to take a hit.

SEE: US imposes visa restrictions on Huawei employees, other Chinese tech workers

The promise to bring faster connectivity to the nation was underpinned by the prospect of 5G technology, especially in areas that are harder to reach with full-fibre broadband because they are located in remote areas. 

Recent reports have shown that missing the 2025 deadline for Gigabit Britain will come at a cost: even a 12-month delay could lead to the UK missing out on £9.7 billion ($12 billion) of productivity benefits.

But as uncertain as the future of 5G in the UK might seem, PP Foresight's Paolo Pescatore stresses that the end of the story might not have been written just yet. "This has been a significant U-turn from the government, but this is not the first time and I firmly believe we haven't seen or heard the end of this."

With such a strong political dimension tied to the fate of Huawei in the UK, Pescatore expects strong reactions from the US, from China, and even from other nations, with the potential to change the UK's course of action yet again.

"Will we see an even tighter time scale to remove Huawei's equipment? Will we see new decisions to let Huawei back in?" asks Pescatore. "You can't rule anything out. We've seen one U-turn, and we might see more."

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