The UK Government has U-turned on its January decision and chosen to phase out the use of Huawei equipment in the 5G network by 2027 saying “the UK can no longer be confident” about future gear from the Chinese vendor.
Telcos won’t be allowed to buy new Huawei equipment from the end of 2020.
The move is a blow to the UK’s position at the forefront of global 5G rollout and is a result of the US stopping Huawei from making any products that use US technologies.
But Oliver Dowden, secretary of state for the UK Department of Digital, Culture, Media and Sport was clear that the decision “will delay 5G rollout by a cumulative 2 to 3 years”.
Dowden was also clear that trying to pull out Huawei gear before 2027 would add huge amounts of extra cost – but that might not satisfy many MPs.
However, Huawei tech will remain part of the 2G, 3G and 4G network until they are phased out, for which there is no end date. However, 3G is set to be switched off in the next few years with coverage gaps replaced by 4G.
The major issue for networks to strip out existing gear will be cost -Mobile UK suggested it would cost the UK economy £6.8 billion to cut Huawei completely out of all UK networks. BT says it would be impossible to do this before 2030.
UK telcos are either using other vendors like Ericsson in their core networks or, like EE, are already phasing Huawei out over the next couple of years.
The UK Government had chosen in January to ignore the advice of the US Government and enable Huawei equipment to be used in up to 35 percent of the non-core UK 5G network.
“This will be a huge blow Huawei and a major headache for most if not all of the telcos,” says analyst Paolo Pescatore. “Ultimately any additional costs always get passed onto the user.
“While there are other network vendors who could pick up the pieces, it is unclear whether they are up to the task. Established rivals like Ericsson and Nokia have been struggling and there’s a resurgence of players like Samsung Networks and Japanese players Fujitsu, NEC.
“In essence, this will have a negative impact on 5G rollout. However, 5G remains in its infancy and the technology has yet to achieve its full potential. A long road awaits. The business model for 5G remains unproven. Telcos are wary given the need to balance to invest while margins are being squeezed. “