Tag Archives: 5G

Lithuania To China: Don’t Call Us…

Screenshot of Huawei P40,  Xiaomi Mi 10T and OnePlus 8T 5G smartphones

LITHUANIA KNOWS A thing or two about standing up to large Communist states. It also has previous with China, most recently over the naming of Taipei’s representative office in Vilnius as Taiwan’s, which led to Beijing demanding Vilnius recall its ambassador.

Thus the exhortation this week by its defence ministry to Lithuanians to throw away their Chinese smartphones and not buy new ones fits a pattern.

The advice followed a cybersecurity analysis by the ministry’s National Cyber Security Centre (NCSC) of three 5G-enabled smartphones introduced into the Lithuanian market last year and seen in the screenshot above. There is one each from Huawei, Xiaomi and OnePlus, a brand of BBK Electronics that also owns the Oppo and Vivo brands. 

The NCSC found that:

  • Huawei’s official app gallery directs users to third-party online stores that sell malicious or virus-infected apps, raising data breach risks; 
  • all three devices routed user data through servers based in third countries such as Singapore that are not covered by the EU’s General Data Protection Regulation and are Chinese company-owned, meaning the data would have to be turned over to Chinese authorities on request; and 
  • Xiaomi’s smartphones have a built-in censorship feature, which it says is deactivated in Europe but, the NCSC says, can be activated remotely. 

Each device uses a variant of Google’s Android operating system.

Huawei says no user data is sent externally and Xiaomi that it does not censor communications. However, the NCSC’s findings will confirm the mounting fears in Western countries that Beijing is using the commercial prowess of its technology companies to advance the deployment of its growing cyber capabilities, particularly for espionage and data gathering. 

The NCSC will release further findings by the end of the year, likely intensifying the European backlash against Chinese hardware.

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UK Excludes Huawei From Its 5G Network

Huawei logo displayed at the Mobile World Congress 2019. Photo courtesy of Huawei.

THE UNITED KINGDOM has fallen into line with the United States in excluding Huawei Technologies from its 5G network. The government announced today that domestic telecoms providers would have to stop buying new Huawei kit by the end of this year and remove existing equipment from their 5G networks by 2027.

The new policy does not apply to Huawei kit in 2G, 3G and 4G networks. Oliver Dowden, the Digital Secretary, told parliament that its latest decision would delay the UK’s roll-out of 5G by more than a year and add millions of pounds to its cost. (Update: UK officials now pegging cost at up to £2 billion ($2.5 billion) and delay at two to three years.)

After a review in January, the United Kingdom previously decided that Huawei could remain in non-core parts of the country’s network but capped at a 35% market share. This was in effect taking a line that the national security risk of Chinese equipment on the UK network could be mitigated.

The government has reversed that view, accepting Washington’s position that telecoms equipment that cannot be trusted is a national security threat to be beaten, and that mitigation cannot work. The UK U-turn follows May’s US sanctions designed to disrupt Huawei’s ability to get its chips manufactured. Concerns over Huawei’s supply chain reliability as much as Washington’s diplomatic pressure, intense as it has been, seem to have weighed in London’s latest decision — or at least in its presentation of it.

Other political factors in play are growing belligerence among UK lawmakers — particularly those from UK prime minister Boris Johnson’s Conservative Party — and across Europe about inbound Chinese investment and influence, the United Kingdom’s need for a post-Brexit trade deal with the United States and the increasingly fractious relationship between London and Beijing over both the Covid-19 pandemic and Hong Kong.

Excluding Huawei from the United Kingdom gives Beijing one less reason to go easy on Hong Kong following the imposition of its national security law.

Nonetheless, London’s decision is being lauded in Washington, which was infuriated by the January review, and welcomed in Brussels. Our man in Washington sends word that officials in the administration are expecting the United Kingdom’s change of heart to resonate among other Western nations.

It is likely to be greeted with annoyance in Beijing, however, and taken as further confirmation of the United Kingdom operates as an arm of US foreign policy (hence the United Kingdom’s emphasis on the supply chain security element to its decision). London will be on alert for retaliatory measures from China in what will inevitably be a period of tense relations between the two.

Separately, Lord Browne, the former head of BP, who had been hired by Huawei five years ago to provide a respected and well-connected face at the head of its UK operations, has said he will be stepping down early as Huawei UK’s chairman. He will leave the company in September.

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UK 5G Decision Muddles UK-US and UK-China Relations

THE UNITED KINGDOM’S renowned ability to muddle through the middle is being put to the test. The Johnson government’s decision to allow Huawei a continuing role in developing the United Kingdom’s 5G networks is a case in point.

Beijing threatened repercussions on China’s trade and investment with the United Kingdom if Huawei was excluded. Washington threatened to cut off intelligence sharing with London if it was not.

The Trump administration is pursuing a global campaign against the telecoms giant which it accuses of spying for China, a charge the company denies. That campaign is a pivotal battle of the Trump administration’s technology war with China.

With Brexit barely hours away and the United Kingdom needing future trading relationships with both of the world’s two largest economies, wiggling along the fence bottom down and damn the splinters was Prime Minister Boris Johnson’s only option. It is a discomfort that will be familiar to US allies that are China’s regional neighbours.

Hence the Shenzhen-based telecoms giant will be allowed up to a 35% share of the UK 5G network’s periphery, i.e., the radio access network, but be banned from the most sensitive part, the core, and excluded altogether from areas near military bases and nuclear sites.

The 35% cap also applies to the rollout of the UK’s fibre broadband network, for which Huawei already has a 45% share. Similarly, the company currently exceeds the 35% cap in two of the three of the four UK mobile networks that deploy Huawei kit.

The government’s decision still needs the UK parliament’s approval. Voices in Washington are urging backbench MPs to oppose it for the sake of preserving the special relationship between the United Kingdom and the United States. They will also argue, correctly, that the core and the periphery of 5G networks are converging, so even periphery access now is a (not so) long-term security threat.

The Trump administration already regards the United Kingdom as an unreliable ally for moves such as joining Beijing’s Belt and Road-linked Asia Infrastructure Investment Bank against Washington’s wishes and for generally being more accommodating to China than it likes — although the Trump administration’s default view is that any ally that does not fall entirely in line with its wishes is unreliable. As the president had made calls to Johnson ahead of the Huawei decision, his next reaction is reliably likely to be petulant.

While the 5G decision will be as irritating to China as it is the United States, for Huawei, the win, in so far as it is not a defeat, comes as the Trump administration is seeking to bolster its barriers against the company gaining access to US technology. Washington has leaned heavily on its allies, although only with any success with Australia, New Zealand and to an extent Japan. European nations and the EU, bracing for a trade assault from the Trump administration, have been less accommodating.

Commerce Secretary Wilbur Ross says tighter restrictions are coming Huawei’s way. However, US reports have said that a proposal to further restrict US companies from selling computer chips and other components to the company, including for the first time via their overseas subsidiaries, has been delayed.

The defence establishment is concerned that the move would accelerate China’s drive to develop indigenous technology. At the same time, the lost sales by US firms could cut into their research and development spending, at the risk of blunting US military technological superiority.

On another front, court proceedings are underway in Canada to have Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, extradited to the United States to stand trial on fraud charges connected to alleged busting of sanctions on Iran. Meng denies the allegations, and the case could take years to resolve.

Prosecutors say Meng’s case is separate from the broader trade dispute between the United States and China. However, the inverse is true. The trade dispute is only a part of the more existential confrontation between Washington and Beijing for technological leadership in which the United Kingdom finds itself uncomfortably caught in the middle.

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Huawei’s 5G Coins It In Despite Washington’s Objections

HUAWEI’S FIRST-QUARTER results suggest that the United States’s campaign against the world’s biggest telecoms equipment maker is having limited effect, especially outside the advanced economies.

The company has long denied Washington’s allegation that Beijing ultimately controls it and that its equipment could be used for espionage in the service of Chinese state security, the basis of the Trump administration’s campaign to prevent other governments from using Huawei’s 5G equipment.

Huawei says its income was 179.7 billion yuan ($26.8 billion) in January to March, a 39% increase on the same period a year earlier. It did not disclose its net profit but said it operated at an 8% net profit margin, slightly higher than in the first quarter of 2018.

It reported sales increases in all its three customer groups — carriers, enterprise and consumer customers. On the contentious 5G technology, it said it had signed 40 contracts with leading global carriers, and shipped more than 70,000 5G base stations, a number it expects to reach 100,000 by May. It says 2019 will be ‘a year of large-scale deployment of 5G around the world’.

In practice, only a handful of countries have heeded Washington’s exhortation to follow it in banning Huawei from their 5G telecoms network: Australia, New Zealand and Japan, all close US allies in Asia.

Europe, which will likely lead 5G rollouts — eleven EU countries have 5G auctions scheduled for this year and six for 2020, with 30% of its internet users expected to be on 5G by 2025 — has been more ambiguous in its response.

Denmark, Germany, Italy, Norway, Poland and the United Kingdom all have expressed concerns about the cybersecurity risks of contracting a firm with opaque links to Beijing. However, Belgium has declined to ban Huawei, saying it has found no deliberate technological compromises in its equipment that could be misused by China’s state, but it will keep the equipment under review. Germany has taken a similar line but is drafting quality and cybersafety standards for 5G suppliers and talking about a ‘no-spying agreement with China.

France is debating 5G legislation that would impose extensive security tests. The report of a Dutch government investigation into Huawei is due in May when the United Kingdom is also expected to make a final decision. London has repeatedly raised concerns about Huawei equipment and the firm’s ability to fix cybersecurity problems but also has one eye on a post-Brexit trade deal with China.

For all of Europe, keeping China, a critical trade and investment ally, on side while securing the Internet of Things devices and automated vehicles that 5G will enable, from malicious state and non-state cyber attacks will be a delicate balancing act, made harder still by the current unease of the transAtlantic relationship. Washington may ban US firms from working with any others, including European firms, who use Huawei technologies and equipment.

Brussels and EU member governments will try to keep the decision-making process on the technical level and not get sucked into the political dimensions that saw Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, Ren Zhengfei, arrested in Canada in December at Washington’s request on charges of bank and wire fraud in violation of US sanctions against Iran. (She denies wrongdoing.)

The European Commission’s recently published recommendations on 5G network cybersecurity rejected bans on specific suppliers (unnamed, but for which read Huawei) and told member states to come up with joint EU-wide security checks for firms building 5G networks in Europe by the end of this year.

While Europe will be an important beachhead for Huawei’s 5G equipment and offers a near-term market, the company is looking beyond Europe. Many parts of Asia, Africa, Latin America and the Middle East will transition from 2G/3G/4G to 5G over the next ten years. That is where Huawei’s future sales lie.

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