There will serious tensions between the U.S. and U.K. on Wednesday, after reports that the U.K. is set to ignore Washington's warnings about telecoms equipment manufacturer Huawei. Despite the last-minute leaking of CIA warnings that had been given to the U.K. government alleging that Huawei had been funded by branches of China's military and intelligence, reports on Wednesday suggested that Prime Minister Theresa May has ruled that the company will not be excluded from the U.K.'s 5G network build-out, albeit with restrictions. First reported in the Telegraph, "the National Security Council, which is chaired by the Prime Minister, agreed on Tuesday to allow Huawei limited access to help build parts of the network such as antennas and other 'noncore' infrastructure." Supporters of the U.K. approach will argue that Huawei has not secured a full 'green-light', focusing on its exclusion from 'core' parts of the U.K. network rather than its more general inclusion, but it is unlikely that Washington will see things that way. Earlier this month, the Times reported that a senior U.S. cybersecurity official had "warned that Britain will harm economic and military co-operation between the countries if it uses Huawei for its next-generation 5G mobile network." Robert Strayer stressed that "the U.S. believes that applying these standards rigorously [will] 'lead inevitably to the banning of Huawei'." Deepening rifts The U.K. has been on something of a rollercoaster with its approach to Huawei. This news is not entirely surprising and is consistent with the flavor of messaging around risk mitigation and segmented networking that have been coming out of the country's National Cyber Security Centre. But a scathing assessment of Huawei's technological security, followed by the CIA news, had suggested that the U.K. might adopt a consistent 'Five Eyes' approach and prohibit Huawei. As I suggested when that news broke, "the U.K.'s view on the authenticity of the CIA material will become clear when we see the political direction the government elects to take." Ultimately, it seems that the U.K. has made an economic decision, rather than a political or security-related one. Excluding Huawei at this late stage in 5G planning would incur billions of pounds in additional costs and materially delay deployments. Faced with that trade-off, it was a pragmatic move. Again, though, Washington is unlikely to see it that way. Theresa May's decision has also split senior members of a government that is already deeply fractured by Brexit. "Sajid Javid, the Home Secretary, Jeremy Hunt, Foreign Secretary, Gavin Williamson, Defence Secretary, Liam Fox, International Trade Secretary, and Penny Mordaunt, International Development Secretary, were said to have raised concerns about the approach." On Saturday, the Times had reported that, according to sources, Huawei "has received funding from branches of Beijing’s state security apparatus... American intelligence shown to Britain says that Huawei has taken money from the People’s Liberation Army, China’s National Security Commission and a third branch of the Chinese state intelligence network." On Wednesday, the Telegraph also reported that the head of U.K. spy agency GCHQ is set to warn fellow members of the Five Eyes intelligence community that accelerating cyber threats pose increasing threats. With a clear focus on Iran and Russia as well as China, Jeremy Fleming "will talk about the risk from the 'unprecedented' scale of cyber threats, and warn that the technological revolution is 'exposing us to increasing complexity, uncertainty and risk', [bringing] unprecedented challenges for policymakers as we seek to protect our citizens, judicial systems, businesses – and even societal norms." Huawei keeps calm and carries on This is another victory for Huawei, which has largely ridden out Washington's campaign and this week posted Q1 revenue growth up at 39%, building on its 2018 performance when it crossed the $100 billion level for the first time. Germany has already decided to reject any ban on Huawei, albeit with an increase in its security assessments. It is anticipated that much of the EU will do the same. In announcing their Q1 results, Huawei said that they have "signed 40 commercial contracts for 5G with leading global carriers and had shipped more than 70,000 5G base stations to markets around the world." A company spokesperson told me earlier in the month that "we are very encouraged by developments that this should not be political and should instead focus on how to address the challenges at an industry level. There is so much misinformation out there that it has truly become political, there are ways to address these challenges, its not unique to Huawei, its cross-industry." The U.K. news will be Huawei's highlight of 2019 so far. And because the U.K. government split could be followed by splits in elements of Five Eyes intelligence sharing as well, the government in Beijing is likely smiling as well. Whether it has been part of their motivation in supporting Huawei so fervently or is just an ancillary benefit, the battle between Washington and Huawei has consumed significant time and effort and has disrupted established U.S. intelligence-sharing arrangements. None more so than the potential here. The chair of the U.K.'s Foreign Affairs Committee responded to Wednesday's news by tweeting that "allowing Huawei into the U.K.’s 5G infrastructure would cause allies to doubt our ability to keep data secure and erode the trust essential to Five Eyes cooperation. There’s a reason others have said no."
UK Prime Minister Theresa May has seemingly agreed to grant Chinese telecoms equipment maker Huawei limited access to help build parts of the country's 5G network despite warnings from the US. Leaked documents showed that the CIA warned the UK that Huawei had been funded by branches of China's intelligence service and military. The US National Security Agency (NSA) is reportedly conducting a secret operation against Huawei, which it says poses an "existential threat" to national security.