London said it will keep high risk vendors out of the most sensitive core parts of the networks, but will allow the company to supply other gear that is critical to the roll-out of 5G, such as antennas and base stations.
In particular, high risk vendors will be “excluded from sensitive geographic locations, such as nuclear sites and military bases”. The country will also impose a cap of up to 35% on Huawei’s radio access components.
Huawei vice president Victor Zhang said the company was reassured that the UK government will let it 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.
China’s ZTE is already banned from the UK, and is also included in the category of high risk vendors. According to a research note issued by Strand Consult, Huawei will likely claim that the UK decision doesn’t hurt its prospects. The note adds that “The fact is that Huawei will be subject to increased restriction and will not be able to enlarge its market share. Moreover, there is no change on the ZTE ban. The UK makes clear that Chinese equipment is not allowed in the core network”.
UK PM Boris Johnson last week discussed Huawei in a phone call with US president Donald Trump. He said the UK could have the best of both worlds: retaining access to the best technology while protecting the data of consumers.