Defying Trump, Britain’s Johnson gives Huawei restricted 5G remit

LONDON (Reuters) – Prime Minister Boris Johnson granted Huawei [HWT.UL] a limited role in Britain’s 5G mobile network on Tuesday, resisting U.S. pressure to exclude the Chinese company from next generation communications over fears Beijing could use them to spy.

Britain had to weigh its “special relationship” with the United States against Chinese trade and investment ties which it wants to develop after leaving the European Union.

Johnson, in the biggest test of his post-Brexit foreign policy to date, ruled that “high-risk vendors” would be allowed into the “non-sensitive” parts of 5G networks.

However, their involvement will be capped at 35%, they will be excluded from the sensitive core, where data is processed, and they will be banned from all critical networks and locations such as nuclear sites and military bases, the government said.

The decision will dismay President Donald Trump’s administration which fears China could use Huawei to access Western communications. It warned London that giving Huawei a role would risk intelligence cooperation.

The White House and U.S. state department did not immediately respond for a request to comment.

“This is a UK-specific solution for UK-specific reasons and the decision deals with the challenges we face right now,” Communications Secretary Nicky Morgan said following a meeting of the National Security Council chaired by Johnson.

The telecoms industry has warned that banning Huawei would cost it billions of dollars and delay the 5G roll out. Huawei’s equipment is already used by Britain’s biggest telecoms companies such as BT (BT.L) and Vodafone (VOD.L), but it has been largely deployed at the edge of the network.

China’s ambassador to London Liu Xiaoming said last year that a block on Huawei would hurt Chinese trade and investment in Britain, telling the BBC it would “send a very bad message not only to Huawei but also to Chinese businesses”.

Huawei was not mentioned by name in the British government’s statement, but British cyber security officials said they had always treated the company as a “high risk” vendor.

Huawei said it was reassured by the UK government’s confirmation that it could continue working with its customers to keep the 5G roll-out on track.

“This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market,” Huawei vice president Victor Zhang said.

CALCULATED COMPROMISE

A U.S. official involved in talks with the UK said the limitations were a positive step, but didn’t go far enough.

“The concern is that they still want to allow Huawei into the computer that’s happening in so-called periphery, that is just unacceptable,” the official said.

“It’s a computing device, so shouldn’t be supplied by Huawei. There’s the potential for all sorts of nefarious activity there.”

Sources told Reuters last week that senior British officials had proposed granting Huawei a limited 5G role, a “calculated compromise” which could be presented as a tough restriction to Washington, while accepted by British operators.

Huawei, the world’s biggest producer of telecoms equipment, has said the United States wanted to frustrate its growth because no U.S. company could offer the same range of technology at a competitive price.

The United States has argued that the distinction between “edge” and “core” will blur as data is processed throughout 5G networks, making it difficult to contain any security risks.

British cyber security officials said they had put special measures in place to mitigate any risks.

“We’ve never ‘trusted’ Huawei and the (measures) you can see … exist because we treat them differently to other vendors,” Britain National Cyber Security Centre (NCSC), part of the GCHQ signals intelligence agency, said in a technical post.

The NCSC said the notion that there was no way to separate core and edge parts of the 5G network “remained untrue”.