Chinese tech giant Huawei has been granted a limited role in building United Kingdom's (UK) 5G network, despite pressure from the US to exclude the company.
On Tuesday, the UK government announced its decision grant Huawei a limited role in the development of its 5G network. UK authorities decided to exclude from "security critical" areas of Britain's networks but allow it to supply less sensitive products.
These security critical areas refer to those that identify customers or make decisions about routing traffic. Despite the exclusion, Huawei will still be able to offer British mobile operators, including Vodafone, BT and Three, less sensitive products such as radio technology and base stations, as long as its market share is limited to 35%.
While the decision will be difficult for the tech company to deal with in the UK and may cause other European countries to follow suit, it is better than the outright ban sought by the US government due to national security concerns.
Berenberg analyst Usman Ghazi said: "It certainly avoids the worst case where they're told to get out." Ghazi added that Huawei's growth may be limited due to the UK restrictions but it may still earn big from the extensive 5G equipment that needs to be installed on thousands of rooftops and towers.
Victor Zhang, a vice president at Huawei, mentioned that it was "definitely reassuring" that the tech firm would be able to continue working with its customers in the UK. Huawei started operations in the country in 2001.
In a statement, the company said: "While Vodafone UK does not use Huawei in its core — the intelligent part of the network — it will now analyze the potential impact of today's decision on the non-core elements of its network."
Currently, Vodafone uses a mix of equipment from Huawei and its competitors, Ericsson and Nokia, for 4G and 5G masts.
