Governments shouldn’t underestimate the impact of walking away from Huawei

Countries that have banned the Chinese telecoms giant need to think about investing in domestic network providers if they’re not going to be left behind in the race to implement 5G.

Relationships between global governments and Huawei have been nuanced to say the least in recent months. From the UK to India and most recently Sweden, the dominoes are falling as the Chinese telecoms giant is banned from 5G networks in an increasing number of countries.

Expelling Huawei from India is certainly one of the most significant moves; China’s premier infrastructure provider will miss out on access to the world’s largest mobile market as a result. Losing a foothold in Sweden is also a symbolic defeat, ousted from the home of its biggest rival, Ericsson. With new restrictions rumoured to be on their way in Germany, Huawei could also be about to fall out of one of Europe’s most significant territories.

Although it is clearly a multi-faceted decision, politicians must be conscious of the impact that turning away from Huawei and China will have on a country’s potential to thrive as a digital nation on the international stage.

Some countries, including the UK, had previously reached a balanced decision on a relationship with Huawei by limiting access to non-core network elements – reducing risk to national security but facilitating innovation. However, international agreements pertaining to networks have become fraught with politicisation. National decisions relating to telecoms and technology influence have now become both a way of retaliating to unfavourable diplomacy, and a catalyst for discontent.

Despite the intentions of those looking for a more balanced approach, this politicisation is epitomised by the Foreign Product Directive issued by the US government. In the UK, and elsewhere, this legislation invalidated many of the security protections put in place around Huawei operations by preventing companies with American products in their supply chain from also using Huawei.

This includes a British evaluation centre in Banbury called The Cell, which monitors and tracks Huawei software and equipment. Under the Foreign Product Directive, The Cell would not be able to monitor new Huawei equipment installed, eliminating any potential transparency that would deliver security assurances.

This regulation has forced aspiring digital nations away from Huawei, which will have a number of implications. On the one hand it breeds tech sovereignty, further entrenched by the isolationism caused by the Covid-19 pandemic, which should be treated with caution and not replace international collaboration.

While value of a relationship with the US is undeniable, one with China, however nuanced, should not be underestimated given the country’s rapid rise to tech prominence. For the UK in particular, there could be a vital role to play as a gateway between China and the European and US markets.

Otherwise, the upheaval of removing Huawei equipment from domestic technology infrastructure and for new suppliers to catch up in any given country will likely take years, cost billions and delay progress on 5G network innovation and rollout. These additional delays and costs will hit rural communities and those already lacking digital access particularly hard, as well as mobile providers who each use Huawei to a different extent.

Whether because of their own political motivations or as a result of US restrictions, governments must move on once a decision has been made to remove Huawei or fall behind on 5G progress.

In the UK, we recently saw the launch of a task force to find a replacement 5G infrastructure provider. This process, alongside an expansion of the deal between BT and Huawei rival Nokia, highlights a new chapter for the British telco sector, albeit one largely based on sourcing a like-for-like overseas replacement as a short-term solution to increase network diversity.

Despite the need to avoid sovereignty, it is also vital to prevent delays to innovation; a key part of achieving this must be to look at what could be achieved by the domestic tech sector. For example, the Japanese government has recently provided significant additional funding for 5G products, while the UK has invested heavily in 5G testbeds and gigabit broadband.

Given the likely ‘tipping point’ that 5G represents in the evolution of advanced networks, governments should also go beyond funding by looking to scale their own network providers to replace Huawei, rather than simply awarding larger contracts to foreign suppliers.

Homegrown initiatives, along with global collaborations such as the D10 initiative – a commitment from the G7 countries, plus Australia, South Korea and India to create alternative suppliers of 5G equipment – are also encouraging signs that innovation is being fostered away from the US-China axis.

Whatever the country, replacing a scaled world leader such as Huawei will be difficult. Despite the risks of network sovereignty, if significant delays to a 5G rollout are inevitable, perhaps the focus should be on creating and growing domestic telecoms providers to foster innovation and identify new software-driven ways to enable ultrafast broadband speeds.

Ultimately, moving away from Huawei may provide greater long-term assurance over security but it will slow down the development and roll-out of advanced network infrastructure. Governments and the private sector have work to do to balance international collaboration with scaling homegrown telecoms suppliers, to ensure their digital futures do not suffer as a result. The author Russ Shaw is founder of Tech London Advocates and Global Tech Advocates. Engineering and Technology