Huawei Technologies went from the base provider of mobile networks in the UK and France to possibly be banned. Initial resistance and commitments from European countries begin to subside after the White House’s relentless campaign.
Both countries indicated this week that they have taken steps to reduce their dependence on the Chinese company. The United Kingdom considers reduce the use of Huawei equipment as of this year, and ANSSI, the French cybersecurity agency, plans to impose an exemption system that is likely to severely limit the use of the company’s products.
A year ago, the scenario seemed much more optimistic for the Chinese company. The UK’s intelligence and security committee had said in July 2019 that blocking Huawei would make networks less resistant to malicious attacks. The committee’s reasoning was that the measure would reduce competition and leave the UK dependent on just two suppliers, Nokia and Ericsson.
UK Prime Minister Boris Johnson tried to strike a deal in January, allowing operators to use Huawei equipment to install their 5G systems, as long as they respect the 35% limit and agree not to use them in cores network.
But pressure from the United States continued to increase, and both European governments and operators had to choose between two world powers. President Donald Trump’s government has resorted to sanctions, making it increasingly difficult for European operators to access products from the world’s largest manufacturer of telecommunications equipment.
“Huawei’s R&D spending growth has accelerated recently,” said Neil Campling, an analyst at Mirabaud Securities. “Its advances in relation to Western peers are significant and, therefore, the United States is using everything it can with its political power – be it trade sanctions, official agreements, unofficial agreements – to try to slow China’s advance.”
Huawei has consistently denied that it poses a security risk and says it operates independently from the Chinese government. Huawei spokesman Paul Harrison argued on Twitter that the U.S. is unfairly conditioning UK policy with sanctions and threatening the launch of 5G in the country.
There are still European markets to be fought. The German government is struggling to establish rules that require safety certification for 5G network providers. Chinese authorities have highlighted German manufacturers – the crown jewel of Europe’s largest economy – as a potential target for retaliation if Huawei were banned from its markets.
The sharp blow to Huawei’s relations with Europe may have occurred in May, when the U.S. banned the company from acquiring microchips that use American technology.
The prevalence of chips that are made with or incorporate American technology has led Pierre Ferragu, an analyst at New Street Research, to tell in May that “Huawei has 12 months to survive”.