The big picture: British Prime Minister Boris Johnson is expected to soon reverse the country's decision to allow Chinese telecom giant Huawei a limited role in the development of national 5G infrastructure. The main reason seems to be the company's deteriorating supply chain, which is likely to force it into using untrusted technology that carries new risks.
The US has been pressuring its allies to drop Huawei from any infrastructure project, and even threatened to cut intelligence ties with countries like the UK and Canada if they continue to use 5G equipment from the Chinese tech giant.
Despite those efforts, the UK earlier this year decided that it would still consider using Huawei's cost-effective equipment to build no more than a third of its cellular network capacity over the next three years, with an explicit ban on rolling out that infrastructure at "core" locations such as military bases.
According to a new report from Bloomberg, it looks like the UK government is reconsidering that decision and its potential implications. The context has now changed as a result of new US sanctions that have severed Huawei's ties with some of its biggest hardware and software partners. The Chinese tech giant sought to mitigate the new limitations by spending billions on a two-year stockpile of American chips, but it will soon be forced to look for alternatives.
As a result, the GCHQ's National Cyber Security Centre revised its earlier assessment of Huawei and now recommends that the company be excluded from 5G deployments as soon as possible. Last month, Defense Secretary Ben Wallace welcomed approaches from other telecom equipment providers such as Samsung, Nokia, and NEC.
There's no official timeline yet, but industry associations are already lamenting the potential costs of having to replace Huawei equipment and shift to new suppliers. Some industry insiders expect the government to offer a window of 12 to 18 months for the process.
Huawei Vice President Victor Zhang said in a statement that the company is open to discussions with the UK government on how to best contribute to the country's 5G deployment. He also noted that "it is too early to determine the impact of the proposed restrictions, which are not about security, but about market position."
Other countriess like France are now following in the UK's footsteps with recommendations for telecom companies to avoid using Huawei equipment. Some like Orange have already switched to Ericsson and Nokia equipment, while existing infrastructure built by the Chinese company is only authorized to operate between three and eight years. If anything, Huawei seems to be getting cornered out of every big market they operate in outside of China.