UK to purge Huawei from 5G by end of 2027

Prime Minister Boris Johnson ordered Huawei equipment to be purged completely from Britain’s 5G network by the end of 2027, risking the ire of China by signalling that the world’s biggest telecoms equipment maker is not welcome in the West.

As Britain prepares to cast off from the European Union, fears over the security of Huawei have forced Johnson to choose between global rivals the United States and China.

He had been under intense pressure from US President Donald Trump, while Beijing had warned London, which has sought to court China in recent years, that billions in investment would be at risk if it sided with Washington.

Reversing a January decision to allow Huawei to supply up to 35% of the non-core 5G network, Johnson banned British telecoms operators from buying any 5G equipment from Huawei by year-end and gave them seven years to rip out existing gear.

“This has not been an easy decision, but it is the right one for the UK telecoms networks, for our national security and our economy, both now and indeed in the long run,” digital minister Oliver Dowden told parliament.

“By the time of the next election, we will have implemented in law an irreversible path for the complete removal of Huawei equipment from our 5G networks.” The reason given for the about-turn was the impact of new US sanctions on chip technology, which Britain’s National Cyber Security Centre, part of the GCHQ eavesdropping agency, had told ministers meant Huawei was not a reliable supplier.

Tuesday’s decision will delay the roll-out of 5G -- cast as the nervous system of the future economy -- by two to three years, and add costs of up to 2 billion pounds ($2.5 billion).

The Dec. 31, 2027 deadline will please British telecoms operators such as BT, Vodafone and Three, which had feared they would be forced to spend billions of pounds to rip out Huawei equipment much faster.

Shares in BT, Britain’s biggest mobile operator, rose 4%.

Hanging up on Huawei marks an end to what former Prime Minister David Cameron cast as a “golden era” of ties which saw Britain pushed as Europe’s top destination for Chinese capital.

But London has been dismayed by a crackdown in Hong Kong and the perception China did not tell the whole truth over the novel coronavirus outbreak.

Huawei said the decision was more about US trade policy than security.

“It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide,” a spokesman said.

In what some have compared to the Cold War antagonism with the Soviet Union, the United States is worried that 5G dominance could lead towards Chinese technological supremacy.

China has said targeting its technology flagship would have far-reaching ramifications, and its ambassador to London warned last week that a U-turn on Huawei would send a bad message to other Chinese businesses.

Chinese imports to Britain doubled in the 15 years to 2018, to about 9% of all goods imported, worth 43 billion pounds.

Meanwhile, Britain’s economy stumbled out of its coronavirus-induced slump in May, dashing hopes of a swift rebound as government budget forecasters said it was on course for its worst year since pre-industrial times.

Gross domestic product grew less than any economist polled by Reuters had forecast, up 1.8% after a record 20.3% slump in April when lockdown curbs were tightest, figures from the Office for National Statistics showed.

With activity in the dominant service sector not recovering as expected in May, Tuesday’s data fuelled doubts about how much of a bounce-back Britain will see after more businesses were allowed to reopen in June and July as Europe’s worst coronavirus outbreak eased.

“For anyone thinking the data were beginning to point to a sharp V-shape (recovery), today is something of a setback,” HSBC economist Simon Wells said.

The pound slipped to a two-week low against the euro and two-year British government bond yields fell to their lowest level on record after the data.

Fallout from COVID-19 slashed economic output by more than a quarter over March and April, and around 9 million Britons currently have their salary paid through a government programme supporting employers hit by the pandemic, which ends in October. Finance minister Rishi Sunak announced a further 30 billion pounds of funding to support the economy last week, but has accepted that joblessness will rise.

Agencies