Gov Tightens Huawei 5G Mobile and FTTP Broadband Restrictions

In another telecoms policy surprise the UK Government has today announced that mobile operators, such as Three UK, EE (BT) and Vodafone, must stop installing “any” Huawei equipment in ultrafast 5G networks from the end of September 2021. A 35% cap on kit will also apply to FTTP and gigabit broadband from Jan 2023.

Just to recap. Back in July 2020 the government confirmed that it intended to ban “high risk vendors” from future rollouts of 5G mobile technology (here), which followed various US sanctions and security concerns around the role of Chinese firm Huawei in UK networks (ZTE is also banned). The ban is set to come into force from 31st December 2020 (i.e. the date when operators must stop procuring new kit), while the removal of existing kit is due to be completed by the end of 2027.

The above move was expected to delay completion of the 5G rollout by 2-3 years and add costs of up to £2bn to operators (e.g. BT alone expects to take a £500m hit). However, the 2027 window for removal should enable operators to retire their kit more naturally (end-of-life approach) and to stockpile supplies for tackling faults, which will reduce the risk of service outages (4G and 5G kit from Huawei is closely linked, so removal is not a simple matter).

Despite this it appears as if the Government was concerned that their policy might have left a loophole open for mobile networks to exploit, which could have enabled stockpiling mobile operators to continue deploying Huawei’s 5G kit.

“While it was always implicit that operators would need to stop installing Huawei equipment – following engagement with industry and clearance through the National Security Council – we have made that requirement explicit,” said the Department for Digital, Culture, Media and Sport (DCMS) as they confirmed the September date. The controls set out in the draft designated vendor direction are below.

The change forms part of the new Telecommunications (Security) Bill, which was introduced to parliament last week and is about to get its second reading. The eagle-eyed will also notice that the Government has made their requirements clearer for FTTP and “other gigabit and higher capable” fixed line broadband ISP networks, which will instead face a 35% cap on the use of Huawei equipment from 28th January 2023.

Back in July the Government had merely advised FTTP operators to “transition away from purchasing new Huawei equipment” and they expected this period to last “no longer than two years,” but at the time they weren’t able to give any solid details as this was said to be dependent upon the outcome of a technical consultation. We note that existing FTTC rollouts will be unaffected, although copper-based services are already on the way out.

We should point out that Openreach has already adopted new FTTP broadband suppliers in the shape of ADTRAN and Nokia, while Cityfibre are also in the process of replacing Huawei’s kit inside the FibreNation network that they recently purchased from TalkTalk (here).

Oliver Dowden MP, Digital Secretary, said:

“Today I am setting out a clear path for the complete removal of high risk vendors from our 5G networks. This will be done through new and unprecedented powers to identify and ban telecoms equipment which poses a threat to our national security.

We are also publishing a new strategy to make sure we are never again dependent on a handful of telecoms vendors for the smooth and secure running of our networks. Our plans will spark a wave of innovation in the design of our future mobile networks.”

The new 5G Supply Chain Diversification Strategy mentioned above is designed to outline the Government’s approach to building a resilient, open and sustainable supply chain. “This will tackle the issues of overreliance on vendors and pave the way for better connectivity to improve people’s lives with lightning fast connections speeds and revolutionary data carrying capacity,” said the DCMS.

As part of this the Government has already established a new Telecoms Diversification Task Force, which is being led by Ex-BT CEO and former trade minister, Lord Ian Livingston. The job of this task force is to explore how to help incentivise research and development of OpenRAN, among other things.

Lord Livingston, Chair of the Diversification Task Force, said:

“Diversification of the UK Telecoms Supply Chain is very important to ensure that our future networks are secure and resilient and that we can maximise the economic and social potential that 5G brings.

As Chair of the Telecoms Diversification Taskforce, I fully support the ambition of the strategy and its objectives. In order to position ourselves at the forefront of the next generation of technology, it is vital that we invest in Research & Development, help shape global standards and work closely with our international partners. I welcome the government’s recent announcement committing investment to ensure that we can have the capability to help deliver this strategy.

The Diversification Strategy sets out what we need to do. The panel of experts in the Diversification Taskforce are working on how we deliver it. The whole telecoms industry together with government and our international partners must work together quickly if we wish to realise the potential benefits of 5G.”

Hamish MacLeod, Director of Mobile UK, said:

“Mobile UK welcomes Government’s commitment, backed with an initial £250m, to promote diversification and resilience in the telecoms supply chain. This will nurture UK talent, foster innovation and competition and deliver more jobs and investment across the economy.”

The strategy will be backed up by an investment of £250m and trials with Japanese vendor NEC.

5G Supply Chain Diversification Strategy

The strategy sets out a number of targeted measures the government will be taking forward:

— Funding a new OpenRAN (Open Radio Access Network) trial with Japanese telecoms vendor NEC. The NEC NeutrORAN project will be based in Wales and will aim to see live 5G Open RAN within the UK in 2021, testing solutions to deploy 5G networks in the most cost effective, innovative and secure way.

— Establishing a world-class National Telecoms Lab. A secure research facility that will bring together operators, existing and new suppliers, academia and the government to create representative networks in which to research and test new ways of increasing security and interoperability.

— Funding the SmartRAN Open Network Innovation Centre (SONIC). Partnering with Ofcom and Digital Catapult, this will be an industry-facing testing facility to foster Open RAN in the UK helping to develop a supply chain with multiple suppliers at every stage.

At present if an operator wants to buy mobile equipment then, as a result of Huawei’s ban, they can often only pick from a few big suppliers (e.g. Ericsson and Nokia), while the OpenRAN approach could increase the number of supplies by adopting a general-purpose, vendor-neutral hardware and software-defined technology approach (this specifically applies to the RAN side of things – infrastructure, masts and antennae).

One UK operator, Vodafone, has already decided to take a big dive into OpenRAN with their plan to upgrade 2,600 sites (e.g. masts supplying 4G and 5G services) between 2022 and 2027, albeit mostly in rural Wales and South West England (here). By doing that the operator hopes to encourage further development and suppliers to enter the arena.

As well as the measures outlined above, in the Diversification Strategy the government has also committed to addressing provisions for legacy mobile technologies like 2G and 3G, including consideration of options to sunset or streamline provision of these services if it is beneficial to diversification. With 2G and 3G networks now over 15 years old and the equipment that supports it offered by just a handful of suppliers, phasing out these legacy technologies could help modernise UK networks and open up opportunities for new suppliers.

Admittedly phasing out 3G could be easier than 2G, since 2G networks are still quite widely used due to their low-power characteristics and wide availability. Suffice to say that today’s announcement covers a lot of different areas and there’s quite a bit for both fixed line broadband and mobile operators to consider, some good and some bad.