UK turns to ‘Five Eyes’ to help find alternatives to Huawei

Britain is stepping up efforts to persuade its “Five Eyes” security partners and other allies to collaborate on finding industrial alternatives to Huawei as a 5G supplier, ahead of its expected decision this week to curb the Chinese company’s role in UK networks.

But while British culture secretary Oliver Dowden has said he is engaging like-minded nations “even more intensely” on a telecoms strategy, one US official warned that the UK first needed to take a harsher stance towards Huawei before Washington could envisage a joint initiative with the so-called group of “D10” democratic countries.

London’s plans would unite the Five Eyes — the UK, US, Australia, Canada and New Zealand — or a broader group of “D10” nations formed of the G7 plus India, South Korea, and Japan, in a joint enterprise collaborating on investment, procurement and research to fast-track Huawei’s rivals.

Since Australia has already excluded Huawei from 5G and Canada is considering whether to take the same path, Mr Dowden hopes he can persuade these countries and others to help diversify the market. “We cannot just act unilaterally as the United Kingdom,” he told MPs earlier this month. “The challenge is ensuring that all other countries align with us in treating it with a sufficient degree of seriousness and drive, and that they really want to make this happen.”

The idea — which was first discussed last year according to UK security officials — has acquired new urgency since fresh US sanctions against the Chinese telecoms company have forced Britain to review its decision to allow Huawei a limited role in its 5G networks.

The UK is now in a bind: the sanctions threaten the security of Huawei’s supply chain, undermining its viability; but there is no easy alternative without incurring much higher costs and delays in 5G rollout. 

Robert O’Brien, US national security adviser, is due to discuss 5G with his counterparts from France, the UK, Germany and Italy on the margins of Bastille Day celebrations in Paris this week.

However, one US official with knowledge of the initiative said “nascent discussions” between the group of D10 countries had not yielded concrete action because of US frustrations at Britain’s tentative stance on Huawei. In particular, London’s approval of the Chinese company’s technology in January despite Washington’s warnings that this would allow Beijing a “back door” to spy on UK communications had eroded trust, said the official, who stressed that any co-operation would be “conditional” on the UK’s decision this week.

“The UK has to show some skin, in terms of what it does and not just what it says it is going to do,” the person said.

A spokesperson for the US state department said only that Washington would “continue to work with the United Kingdom and all of our allies and partners to safeguard 5G networks”.

Britain, meanwhile, is keen to corral its allies to strengthen Huawei’s rivals, Nokia and Ericsson, bring new vendors into the market and invest in open source technology — OpenRAN — which would allow telecoms carriers to buy off-the-shelf hardware from a range of vendors, rather than tailor-made systems. The UK also is striving to identify “common standards” which would increase interoperability between markets.

Robert Hannigan, former director of GCHQ, the UK’s signals intelligence agency, told the FT such collaboration was a “good idea” and something Britain and its allies “should have done many years ago”.

However, some have expressed scepticism about whether it could work. “You’re not talking about a military or security or intelligence alliance, we’re actually talking about an industrial policy alliance,” one western security official said. “It would be brilliant . . . but sitting around declaring that we’re going to have a Five Eyes industrial solution or D10 industrial solution is much easier said than done.”

Kori Schake, director of foreign and defence policy at the American Enterprise Institute in Washington, likened the idea to an international version of the US Committee on Foreign Investment, known as Cfius, an inter-agency panel that can block deals on national security grounds.

“If the Five Eyes get together and create a common process about where they will and will not accept foreign investment, allow the purchase of technology companies . . . that would be a massive expanse of co-operation and into an area that would give them quite a lot of influence over economics,” she said.

The US is already trying to implement much of what the UK is proposing. As well as lobbying other governments to exclude Huawei, the US has launched an array of programmes including the “Blue Dot Network”, a joint public-private sector initiative with Australia and Japan to certify infrastructure networks around the world for transparency, sustainability and development impact, widely regarded as a rival to China’s Belt and Road Initiative.

The administration has also charged its new International Development Finance Corporation (DFC) — a merger of existing agencies that supports US investments overseas — with financing Huawei-free networks abroad.

While the DFC has a lending capacity of $60bn, it cannot compete with the hundreds of billions poured into Belt and Road by Chinese institutions. Although Huawei is not a state-owned enterprise, cheap Chinese loans and subsidised infrastructure projects are a powerful incentive for countries to use the company’s technology.

The US is also seeking to accelerate the development of OpenRAN technology, and Congress has pushed for direct funding for research. But such proposals are likely to take years to show results, and risk threatening the market position of existing Huawei rivals. 

“The US has launched a variety of initiatives, including propping up open-source alternatives where Huawei cannot compete,” says Hosuk Lee-Makiyama, director of the European Centre for International Political Economy think-tank in Brussels. “But there is no guarantee yet that such technologies will actually work in large scale.”

Additional reporting by Nic Fildes in London