The UK is set to toughen the rules under which Huawei Technologies Co (華為) operates in the kingdom, while stopping short of an outright ban on the Chinese telecom equipment maker, according to people familiar with the matter.
The measures, designed to address concerns that Chinese intelligence could use Huawei’s systems to spy on other nations, are expected to involve closer state oversight and could restrict the vendor from some sensitive parts of the UK’s telecom networks, said the people, who asked not to be identified.
The results of a six-month review of the UK’s telecom supply chain were on Tuesday submitted to the National Security Council chaired by British Prime Minister Theresa May.
Officials are to spend the coming days working through the details before announcing a final decision.
The British government yesterday declined to comment on a Daily Telegraph report that May had already decided to let Huawei build parts of the new networks.
Western allies are watching closely.
The UK has monitored Huawei’s systems for several years, allowing it to emerge as a major supplier of UK communications infrastructure.
The Shenzhen-based company denies that its equipment is vulnerable to state espionage.
The issue has divided government departments, with some officials pushing for tough restrictions and others concerned this would saddle the industry with extra costs and delay infrastructure upgrades, the people said.
The core is the brain of a network, housing control functions and private customer information.
The British government has been weighing whether to force all operators to adhere to security guidelines that already apply to the UK’s dominant telecom, BT Group PLC, which is set to remove Huawei equipment from the core of the EE mobile network it bought in 2016.
The guidelines could exclude vendors deemed as risky from law-enforcement functions such as wiretaps or installing equipment in Westminster, the home of central government.
Officials are considering rules to ensure equipment in a given area comes from different vendors so that operators are not reliant on a single supplier’s technology, according to people familiar with the review.
Operators could be restricted from allowing vendors to manage their networks, according to one person familiar with the deliberations.
Huawei has signed such “managed services” contracts with Telefonica SA’s O2 and CK Hutchison’s Three UK.
The review could lead to new powers for communications regulator Ofcom, which is responsible for auditing and enforcing telecom security according to recent guidance from government.
Ofcom is due to launch a cybersecurity attack testing system, it said in its annual plan last month.
Forbidding Huawei to supply equipment such as masts and antennas for upgraded mobile networks would be more drastic and is seen as unlikely.
Technical experts say the radio access network is a low-risk part of the system. It also accounts for the majority of Huawei’s presence and sales in the UK.
Telecoms say such a ban would cost them hundreds of millions of British pounds and delay the rollout of fifth-generation networks by years.
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