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China tech

UK looks at capping mobile phone groups' use of Huawei equipment

Moderate approach to Chinese telecoms hardware group limits disruption to 5G roll-out

LONDON (Financial Times) -- The UK could restrict mobile phone operators from using Huawei's equipment in more than half their networks following a government review of telecoms infrastructure, according to people briefed on the matter.

The Department for Digital, Culture, Media and Sport is preparing to publish the review of telecoms infrastructure in the next few weeks. The review is expected to set out Britain's position on next-generation mobile networks amid intense scrutiny of Huawei.

The UK has so far taken a more moderate approach to the Chinese telecoms equipment maker than allies such as the US, Australia and New Zealand, which have blocked mobile operators from using Huawei equipment in fifth-generation networks.

Instead of an outright ban, two people briefed on the British government's telecoms infrastructure review said it was considering a cap that would restrict mobile operators from using Huawei's kit in more than 50 per cent of their networks.

Although the review may therefore curb Huawei's opportunities in the UK, it would allow mobile operators to roll out 5G networks without disruption as none had planned to use the Chinese company as sole supplier.

The potential move was first reported by the Sunday Telegraph.

A UK government spokesperson said on Sunday: "The security and resilience of the UK's telecoms networks is of paramount importance.

"We are conducting a review of the supply chain to ensure a healthy, diverse and secure supply base, now and into the future. This is a thorough review into a complex area and will report with its conclusions in due course."

Huawei declined to comment.

Huawei has become a powerful global player in the telecoms equipment market over the past 20 years, but the company has been dogged by controversy, notably in the US.

This is partly because the company's founder, Ren Zhengfei, was an officer in the People's Liberation Army. There have been longstanding concerns in Washington that Huawei could have close links to the Chinese military, and that this might threaten the security of its customers' telecoms networks.

Last November, the UK warned mobile operators to consider their suppliers carefully as they build 5G networks, in a move that industry figures said was focused on Huawei.

Matthew Gould, a senior official at the digital department, said in letters to several companies that their 5G supply chains may be affected by the telecoms infrastructure review.

Separately, a UK watchdog that monitors Huawei's British products said in a report last July that it could only provide "limited assurance" that all risks to national security from the company's involvement in telecoms networks had been "sufficiently mitigated".

Huawei said in February that it could take up to five years to overhaul its software and engineering processes to address Britain's technical concerns about its equipment, and pledged to spend $2bn on the issues raised.

Tensions between Washington and Beijing over Huawei intensified in December when Meng Wanzhou, the company's financial officer and Mr Ren's daughter, was arrested in Canada in connection with fraud charges brought by the US.

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