US sanctions targeting Huawei are “likely” to hit the Chinese telecoms equipment maker’s ability to supply 5G mobile phone networks in the UK, culture secretary Oliver Dowden said on Tuesday.
The statement by Mr Dowden comes as the British government is weighing whether to reverse its January decision to allow Huawei a limited role as a supplier of 5G networks.
Boris Johnson appeared to pave the way for a U-turn on Huawei on Tuesday after pressure from rebel Conservative MPs and the US government to drop the company amid claims it gives Beijing a means to spy on UK communications.
“I am not a Sinophobe, I won’t be drawn into Sinophobia,” the prime minister told reporters. “But we need to strike a balance to protect critical infrastructure from hostile vendors.”
The government moved to reopen its decision to give Huawei a role in providing 5G networks after the US in May introduced new export controls aimed at cutting Huawei off from access to semiconductors made with American equipment.
Officials at the National Cyber Security Centre, a branch of the GCHQ signals intelligence agency, began an emergency review into the impact of the US sanctions on Huawei’s supply chain.
A report by the NCSC has now been passed to ministers, including Mr Dowden, who are evaluating the government’s response.
“We have, since the middle of May, had the US sanctions in respect of Huawei, so clearly given that those sanctions are targeted at 5G . . . it is likely to have an impact on the viability of Huawei as a provider for the 5G network,” Mr Dowden told the House of Commons defence select committee on Tuesday.
UK officials have previously told the Financial Times that the US sanctions represented a “material change” in Huawei’s risk profile, partly because it would be harder for Britain to vet any Chinese-made semiconductors used by the company.
Asked by MPs whether it was a case of “not if but when” the UK would remove all high-risk vendors, including Huawei, from its telecoms networks, Mr Dowden appeared to agree.
“But there is a big difference as to the path to getting to that point,” he said.
When Mr Johnson authorised a limited supplier role for Huawei in the UK’s 5G networks, he excluded the Chinese company from the sensitive “core” of the infrastructure and capped its market share at 35 per cent.
Mr Dowden admitted these restrictions had caused a year’s delay in the rollout of the networks.
Since the NCSC review, some telecoms industry executives have become resigned to removing Huawei equipment from their networks altogether over time.
This has prompted a warning from Vodafone that a rapid “rip and replace” programme, as sought by some Conservatives, would cost the UK its position as one of the leading countries in the rollout of 5G technology.
Mr Dowden suggested more pain might lie ahead. “We won’t hesitate in taking decisions that will impose additional costs on mobile network operators. The primary consideration is national security,” he told MPs.
Huawei has repeatedly said it is a private company and denied accusations it would be involved in espionage on behalf of the Chinese state.
Victor Zhang, a Huawei vice-president, said the company was “investing billions to make the prime minister’s vision of a ‘connected kingdom’ a reality so that British families and businesses have access to fast, reliable mobile and broadband networks wherever they live”.
“We have been in the UK for 20 years and remain focused on working with our customers and the government to ensure the country gets the jobs and economic growth created by 5G as quickly as possible,” he added.