UK telecoms face huge fines for Huawei breaches

Britain’s telecoms companies face fines of up to £100,000 a day if they do not comply with rules aimed at phasing out Huawei equipment from the country’s 5G networks, new draft legislation will stipulate.

On Tuesday, the government will present its telecommunications bill to parliament. It will form the legislative backbone of its plan to reduce Britain’s reliance on “high-risk vendors”, including China’s Huawei, in the communications infrastructure.

The government has added a new ban on the installation of Huawei equipment in the run-up to the introduction of the bill to appease concerns among backbench Tory MPs that telecoms companies would look to circumvent the laws by using stockpiled equipment, according to a person with direct knowledge of the plan.

That new installation ban, which will come into force before the next election in 2024, comes on top of the existing measures designed to phase out the use of Huawei equipment by 2027 and will be included as part of secondary legislation published next week.

That could further disrupt the telecoms industry’s plans to cope with the government’s direction on the use of Huawei for critical 5G networks because kit purchased in recent months to fulfil existing build plans or as replacement parts will effectively have a more stringent use-by date.

In July, the UK government banned British telecoms operators from buying new Huawei 5G kit from the end of this year and set a deadline of 2027 to replace any equipment that has already been installed. That move marked a U-turn for the government as it had previously said Huawei would be allowed to provide a third of the equipment needed for future 5G networks.

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The U-turn on Huawei followed months of intense pressure from US authorities to ban the Chinese company from Britain’s telecoms networks on national security grounds.

The government argued that it raised the bar on security at a time when networks were under increasing attack and that the telecoms industry’s investment decisions had been driven by cost and commercial strategy.

The telecommunications bill will detail the penalties that companies including BT, Vodafone and Three could face if they fail to comply with the government’s orders. Those fines could be levied from next year but are more likely to come into force heading into 2027 as companies grapple with the complex task of overhauling their mobile networks to weed out Huawei software, routers and antennas.

The bill proposes a maximum fine of up to 10 per cent of revenue, a typical threat for telecoms companies for persistent poor behaviour, or £100,000 a day if they fail to meet the new standards set by the government.

Oliver Dowden, the culture secretary, said: “We are investing billions to roll out 5G and gigabit broadband across the country, but the benefits can only be realised if we have full confidence in the security and resilience of our networks. This groundbreaking bill will give the UK one of the toughest telecoms security regimes in the world and allow us to take the action necessary to protect our networks.”

Ofcom, the telecoms and media regulator, will be empowered by the legislation to monitor whether telecoms companies are operating in accordance with the law. That could include spot checks of network equipment, independent tests and demands to view documents.

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The regulator will now be responsible for enforcing that companies adhere to the laws around the use of equipment by “high-risk vendors”. That replaces the existing regime whereby telecoms companies in effect set their own standards, although a branch of GCHQ, the government intelligence service, has tested and vetted the Huawei equipment used in Britain’s communications networks.

Victor Zhang, vice-president of Huawei, said: “It’s disappointing that the government is looking to exclude Huawei from the 5G rollout. This decision is politically motivated and not based on a fair evaluation of the risks.”



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