The UK is reported to be one country which regards NEC, fresh from its success in Rakuten’s 5G network (see Special Report, above), as a potentially useful vendor to help plug the hole left by sanctions against Huawei.
When the UK government decided against barring Huawei from the UK operators’ 5G RANs – instead imposing 35% caps on its presence in 5G or fiber networks, and a ban in the 5G core – the US administration was furious. The decision was in line with those of many European countries – keeping Huawei out of the core in case hotly denied spyware allegations prove true, but letting it into the RAN – the UK under prime minister Boris Johnson was presumably expected to be more compliant with the USAs’ desire for a complete block on Huawei.
The issue was overshadowed for a while by the pandemic, but now, the Johnson government is conducting a reassessment and is said to be gearing up for barring Huawei from the 5G networks completely by 2023. And according to Bloomberg sources, UK officials have been in talks with NEC with regard to diversifying the supply chain.
Of course, the government would do well to stay well clear of favoring particular vendors, though some US politicians are close to overstepping that mark with their aggressive backing for O-RAN as a way to build up competition against Chinese suppliers. The UK MNOs will no doubt be eyeing NEC’s new core and RAN offerings with interest, as well as Samsung’s products (Samsung did supply Three UK’s 4G network but was then replaced by Huawei at the 5G stage). But their biggest headache, if the government does adopt a more stringent policy against Huawei, will be replacing its existing equipment, and re-tendering for any 5G deals which were already awarded.
The UK operators have argued loudly in favor of being able to make their own free choices of suppliers, and being allowed to defend their own networks against any security breaches. While Three is in the worst position because it had adopted a single-supplier approach in 5G, Vodafone and BT are also significant Huawei customers.
Under the capping system, they would have had a limited amount of rip-and-replace to do (BT was replacing the Huawei mobile core used by EE anyway, in line with its own earlier policy). But a full replacement by 2023 would be more challenging – not because they will have to remove non-5G base stations, but because they will often be deploying early 5G by activating the 5G capabilities of a 4G SingleRAN site.
It will be even worse for Vodafone if some other governments go for a full ban. While it has a multiple vendor approach in the UK (and its network is shared with O2, which has not used Chinese equipment there), in four countries – Czech Republic, Greece, Hungary and Romania – it relies entirely on Huawei. According to Strand Consult, Huawei’s market share at Vodafone across Europe is bigger than its market share in any of the Chinese operators. However, Vodafone had already decided to remove Huawei from its core networks across Europe, a process which will take 4-5 years and cost €200m.