The Farm: Huawei Loses in the UK

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Newt Gingrich is raising alarm bells about the latest round of 5G negotiations taking place today (January 28th) in the UK with Huawei — but they aren’t a total win for Beijing. In fact they will likely complicate legal and regulatory issues for Huawei as it sets out to collect revenue on already deployed 5G equipment. It will also be drawn into a series of prolonged legal battle to repair a reputation tarnished by allegations of mass espionage in collusion with the People’s Liberation Army. While Huawei has already deployed its infrastructure to France and Germany, the UK is hotly contested territory where the government has been making feeble attempts to delay or block the procurement of Huawei’s equipment — much to the dismay of the intelligence community in the United States.

According to CNBC, Huawei has been approved in the UK for only (up to) 35% of the countries upcoming 5G infrastructure — barring deployments in certain areas like military installations. This appears, on the surface, to be a defeat for Huawei as it will mandate the development of more interoperable and open telecommunications platforms — where Huawei will be permitted to deploy its antennae, but other vendors will be required to deploy and service backend and “longhaul” communications infrastructure. These different platforms will be required to communicate with one another freely, reducing on some level the ability for the CCP to gain total domination over British data. These regulations will ensure the diversity of components and competition in the UK’s 5G systems and give Western companies the opportunity to compete with Huawei, which is simply a state-sponsored mass surveillance operation.

“The cap at 35% ensures the U.K. will not become nationally dependent on a high risk vendor And allow[s] two Radio Access Network (RAN) vendors,” the U.K.’s National Cyber Security Centre said … on Tuesday.

https://www.cnbc.com/2020/01/28/huawei-uk-chinese-firm-allowed-limited-access-to-uk-5g-network.html

An additional problem this will create for Huawei is that due to the fact they are now dependent on revenues from Western companies due to enormous debt burdens, this update may trigger renegotiations of contracts that Huawei stands to lose from. They have been working under the assumption that they would have unfettered access to the UK market and revenue streams, so any hiccups during the contracting and legal phases of this operation will cause a contraction in revenues for the foreseeable future.

Author: Halliburton

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