Building on reports from last week, the U.K. has passed a new law whereby carriers will be barred from installing new Huawei equipment as early as the end of September next year. They will also be banned from outsourcing service management to the Shenzhen firm from April 2021 except in exceptional circumstances.
The law comes after Huawei was considered a national security and privacy threat, especially with its 5G equipment. The U.S. put hefty sanctions on the Chinese firm and consequently pushed its allies to avoid doing business with it as well. Conservative MPs have since then called for the complete removal of all Huawei installations from the U.K.
While the complete ban is due by 2027, carriers will be barred from buying new equipment from the Chinese firm come January 2021. However, they will be allowed to overhaul existing systems beyond the initial January deadline. As expected, prominent carriers are will now be reliant on Nordic firms like Nokia Oyj and Ericsson AB, who have already secured contracts following the Huawei ban.
To help curb resultant dependency on these Nordic firms, the U.K. government wants to speed up the phasing out of older 2G and 3G technologies. A National Telecoms Lab will also be established to research security and increase compatibility between vendors, as well as fund trials with potential challengers like Japan's NEC.
Source: Bloomberg
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