The 5G unit at Huawei could be staring down another setback in the UK, following further US sanctions against the company. That's based on recent news out of the region, reportedly stemming from the potential outcome of a review by the National Cyber Security Centre (NCSC).
The review itself was announced on Sunday. It's been described as "designed" to remove Huawei equipment in British phone networks. More specifically, that's a goal it hopes to achieve by 2023 and to stop internal conflicts within the government. Primarily, those are conflicts with a subset of leaders who are opposed to any use of Huawei equipment.
In effect, the review is expected to advise against using Huawei equipment to build out the UK 5G network. And the decision comes down to recent US sanctions that call into question some of Huawei's supply chain.
The controversial sanctions in question effectively stop Huawei from using US semiconductors and software to build 5G equipment. So the Chinese networking and mobile giant will have to look elsewhere when it builds its networks. At issue here is the fact that at least some of those sources would be "unfamiliar and untested" components.
Those suppliers' solutions could potentially be exploited, sources say. That could result in the review deeming Huawei a risk to national security.
Huawei 5G ambitions have absorbed blow after blow from US sanctions
Now, this isn't the first run of sanctions to impact Huawei or its 5G ambitions. But the conglomerate has previously endured in spite of sanctions imposed by the US over the years. Prior to the most recent of those, the company had secured its position as a top provider in much of Europe. And it's mobile unit has seen plenty of growth too.
In the UK, a policy announced by ministers in January set a limit on Huawei networking equipment for the nation's 5G. Specifically, that set the limit at 35-percent of networking. So Huawei could still take part in the buildout of key aspects of the network. But the policy would cut off Huawei from certain portions of the network to alleviate potential risks.
The end result of that would be lower costs for BT, Vodafone, and other UK-operating phone companies.
If the company loses that as a result of US sanctions, that could be a major setback for its 5G goals. The company has repeatedly denied claims that it works as with the Chinese government on surveillance using its equipment.
In light of the possibility of a UK review to eliminate its equipment entirely, Huawei Vice president Victor Zhang has responded. The executive indicates that the company is happy to discuss any concerns with the NCSC. Huawei hopes that discussion will help it "to continue the close working relationship" it has enjoyed "for the last 10 years."
Growing support may be the nail in Huawei's UK coffin
The potential for a turnaround in UK policy on Huawei 5G may not be solely dependant on US sanctions — although those still play a prominent role. Conservative pushback against the 35-percent cap, led by Sir Iain Duncan Smith and Bob Seely appears to be gaining traction. The group reportedly believes it now has the support it needs to stop the use of Huawei equipment entirely.
Mr. Seely took to Twitter on Sunday to say that there are 59 MPs now in favor of removing Huawei. That is enough to add weight to the initiative.