Britain will let Huawei Technologies Co. play a limited role in building the country’s next-generation mobile phone networks, denying a long-running attempt by the U.S. to have the Chinese tech giant barred.
In a statement released midday in London, the U.K. said it will keep high risk vendors, alluding to Huawei, out of the most sensitive core parts of the networks but will allow the company to supply other gear that’s critical to the roll-out of 5G, such as antennas and base stations.
The country will also impose a cap of up to 35% on the Shenzhen-based vendor’s radio access components, so phone carriers like BT Group Plc’s EE and Vodafone Group Plc may face a challenge reducing their dependence on Huawei.
High risk vendors, a category which could also include China’s ZTE, which is already banned from the U.K., are also to be “excluded from sensitive geographic locations, such as nuclear sites and military bases.”
The recommended 35% cap will be kept under review and could reduce over time, the statement said. BT is already set to switch out Huawei core network components inherited when it bought the EE mobile network in 2016.
In a statement, Huawei Vice-President Victor Zhang said it was “reassured” that hte U.K. government will let the company keep working with carriers on 5G. “This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future,” he said, committing to build on Huawei’s more than 15 years supplying U.K. telecom operators.
The widely-expected announcement by Prime Minister Boris Johnson’s government is a compromise between the outright ban on Huawei sought by the U.S. and the access sought by telecommunication companies. While it ends months of political wrangling, it remains fraught with peril for Johnson as he prepares to end 47 years of European Union membership for the U.K.
The Confederation of British Industry, the leading business lobby in the country, said “this solution appears a sensible compromise that gives the UK access to cutting-edge technology, whilst building in appropriate checks and balances around security.”
A key pillar of Johnson’s vision for a future outside the world’s richest single market is a trade deal with the U.S. and the Huawei license risks setting up a clash with President Donald Trump.
By curbing Huawei’s access but still allowing the supplier to play a role in 5G, British officials are betting they can manage any security risks at home and still maintain intelligence-sharing ties with the U.S. and other allies.
Johnson discussed Huawei in a phone call with Trump on Friday, though his remarks on Monday suggested he wasn’t swayed by the push for a total ban. The prime minister said the U.K. could have the best of both worlds: retaining access to the best technology while protecting the data of consumers. British security services deem the risks manageable.
For the U.K. timing of its announcement is particularly sensitive. U.S. Secretary of State Michael Pompeo, who had warned Johnson’s predecessor not to “wobble” on the issue, is due to visit on Wednesday.