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UK Allows Huawei To Build Part Of Its 5G Network

The U.K. government said Tuesday it will allow Huawei to build part of its 5G network, despite requests from the Trump administration to ban the Chinese company.

Benzinga · 01/28/2020 13:49

The U.K. government said Tuesday it will allow Huawei to build part of its 5G network, despite requests from the Trump administration to ban the Chinese company.

What Happened

Boris Johnson's government will task Huawei with building only noncritical parts of its future 5G network. The country's National Security Council felt that security concerns raised by the U.S. and other governments are in fact manageable.

Huawei won't have direct access to centralized parts of the 5G network that would route data and Huawei's technology won't be located near military and nuclear facilities, according to The Wall Street Journal. The Chinese company is also limited to a market share on the 5G network of no more than 35%.

Why It's Important

Trump and Johnson spoke about Huawei and the country's 5G network last week by telephone. U.S. Treasury Secretary Steven Mnuchin was in the U.K. over the weekend and said it's critical to creating infrastructure "that's protected." Most notably, the U.S. administration believes Huawei's presence in 5G could compromise intelligence sharing.

"Is the risk worth it?" WSJ quoted Tom Tugendhat, a lawmaker in Johnson's government, as saying. "If even the communist party in Vietnam reject it…perhaps we should be aware of strangers and the gifts they bear."

Other countries like Germany will decide later this year if they will follow the U.K.'s move and let Huawei work on its 5G network.

Shares of some 5G-related stocks were trading higher Tuesday morning, including Qualcomm, Inc. (NASDAQ: QCOM) Skyworks Solutions Inc (NASDAQ: SWKS).

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