The United Kingdom has banned Huawei from its 5G telecommunications network, overturning the January decision to allow the Chinese company a limited role in building the country’s superfast wireless infrastructure.
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The decision is a serious blow for Huawei, which has been operating in Britain for 20 years. Europe is a key market for the company, which accounts for 24% of last year’s sales.
The British government on Tuesday requested some operators such as BT and Vodafone to remove existing Huawei equipment from their 5G networks.
Digital and Culture Minister Oliver Dowden said new US sanctions imposed on the company in May “significantly changed” the landscape.
“Given the uncertainty, this creates around Huawei’s supply chain, the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment,” Dowden said.
US Secretary of State Mike Pompeo last month said that citizens around the world are waking up to the danger of the Chinese Communist Party’s surveillance apparatus.
Huawei’s exclusion for Britain, however, represents a problem after Brexit, because the country is looking for new commercial opportunities. The exclusion will delay also the launch of 5g in the country.
The U.S. campaign against Huawei reinvigorated in May with the issue of new sanctions that reduced the company’s ability to produce and obtain chips that use American-made technology.
The introduction of new sanctions against the Chinese giant has led the British Security Council to order the gradual removal of its technology.
Huawei on Monday announced half-year results earlier than usual, signaling slower revenue growth. The company is already experiencing a decline in smartphone sales after Washington prevented it from accessing Google apps. Due to this exclusion, Huawei devices are less attractive to consumers in international markets.
The new U.S. sanctions also limit companies such as TSMC (TSM), a Taiwan-based company, from exporting computer chipsets and other key components to Huawei. Without these components, Huawei cannot build 5G base stations and other equipment.
The sharing of intelligence between the United States and Great Britain would have been jeopardized by the use of Huawei infrastructure, according to the American government.
Huawei has always denied American accusations.