By Lina Saigol
Telecom service providers will be banned from installing Huawei equipment in the U.K.’s 5G networks from September 2021, the government announced on Monday, as it moved to toughen its stance against the Chinese technology giant.
The U.K. had ordered telecom operators in July to stop buying Huawei 5G equipment by the end of the year, and gave them until 2027 to strip out any of the company’s existing gear from their systems amid increased pressure from the U.S.
“I am setting out a clear path for the complete removal of high-risk vendors from our 5G networks,” the culture minister, Oliver Dowden, said in a statement . “This will be done through new and unprecedented powers to identify and ban telecoms equipment which poses a threat to our national security.”
The ban will be part of the Telecommunications (Security) Bill , which is aimed at tightening security requirements, and receives its second reading in the House of Commons on Monday.
The bill includes fines for companies that don’t comply of up to 10% of their revenues or, in the case of a continuing contravention of the rules, £100,000 ($133,404) a day.
The U.K. has hardened its stance against China after the U.S. imposed another round of restrictions on Huawei in August, when the Trump administration renewed accusations that the company’s telecommunications equipment is used for spying. Huawei has repeatedly denied accusations that it might facilitate Chinese spying.
On Monday, Dowden also set out a 5G-supply-chain diversification strategy, backed by a £250 million ($334 million) investment, to ensure that the country is “never again dependent on a small number of suppliers.”
The strategy includes setting up a U.K. National Telecoms Lab research-and-development facility, and funding a trial with the Japanese information-technology company NEC (TKS:JP:6701) to develop innovative open-radio technology for 5G and make it easier for competitors to enter the market.
Following the government’s decision to remove Huawei equipment from future networks, the U.K. is now reliant on just two mobile-access network-equipment suppliers — Finland’s Nokia (HEL:FI:NOKIA) and Sweden’s Ericsson (NAS:ERIC) . “This represents an intolerable resilience risk and absent intervention it is unlikely that the market will diversify,” Dowden said.
He has previously warned that the Huawei ban would further delay the rollout of 5G by two to three years, and cost the phone companies £2 billion ($2.5 billion), which could be passed on to consumers.
In September, Nokia said it would replace Huawei as BT Group’s (LON:UK:BT.A) largest equipment provider, after winning a deal to supply 5G networks across the U.K.
A recent study by Oxford Economics, sponsored by Huawei, found that the Chinese tech giant contributed £3.3 billion ($4.4 billion) to U.K. gross domestic product in 2019, while supporting 51,000 jobs through its economic activity.