United States Secretary of State Mike Pompeo warned key ally United Kingdom on Wednesday against engaging in a business partnership with Chinese technology firm Huawei. Addressing a press conference in London, Pompeo apparently indicated that U.S. security collaboration with the United Kingdom would be at risk if Huawei was allowed to build a fifth-generation or 5G telecom network in the country.
The warning comes after a report published in Daily Telegraph two weeks ago claimed that the U.K. had allowed the Chinese company to build non-critical parts of 5G cellular infrastructure in the country. However, a government minister denied the report, saying that a final decision about the setting up of the next-generation wireless technology was yet to be made.
The impact of 5G wireless systems promises to be nothing short of revolutionary. It will offer astoundingly high internet connectivity speeds compared to the current fourth-generation (4G) networks. Huawei is a global leader in offering the equipment necessary to build 5G systems for wealthy customers, alongside other firms like Sweden-based Ericsson and Nokia from Finland.
5G networks will radically improve speed, coverage, and responsiveness of internet connectivity for potential users. For example, 4G technology currently offers download speeds of up to 20Mbps (megabytes per second), which could go up to 500Mbps to 1500Mbps with the next generation of technology. In addition to speed, 5G systems have the ability to handle a hundred more devices on a single cell tower than existing networks. The latency on a connection—meaning, the delay in receiving signals from nearby towers—will reduce too.
The potential benefits of this leap in connectivity speed have already been realized by the industry, with top phone makers pledging to build devices that make use of this technology. In addition to smartphones, driverless cars, virtual reality headsets, cloud services, and a host of other technologies could reap huge benefits from mobile connections provided by 5G.
However, some warn that growing Huawei dominance in the sector risks undermining the security of nation-states in light of the murky past of the company, as well as questions about ownership and corrupt executives. According to findings of the research firm Dell’Oro Group, Huawei controls almost 29 percent of the global market for telecom equipment, which is nearly as large as the combined total of the next two industry leaders, Ericsson (13 percent) and Nokia (17 percent).
Founded by Ren Zhengfei in the late 1980s, the company has made remarkable progress after being repeatedly accused of selling knock-off equipment. A report in The Washington Post recently claimed that the company has worked hard to improve reputation after some initial setbacks, and now offers cutting-edge equipment at competitive prices, mostly under-cutting rivals, to customers all over the globe. U.S. President Donald Trump has accused Chinese firms of committing intellectual property theft in America more than once over the course of this year.
But concerns over funding sources and the actual ownership of Huawei still persist. In April 2011, Bloomberg reported that Huawei had secured business deals in Brazil and Mexico with the direct support of a national development bank in China. Recent partnerships of the company with Iceland, Switzerland, Saudi Arabia, and Turkey have brought these problems to the fray once more.
In addition to financial irregularities, Huawei has not been able to settle questions about company ownership. Huawei claims that it is entirely owned by its employees and no outside entity holds any shares, according to The New York Times. But new Chinese laws, which require private firms working in China to assist the government with intelligence sharing have caused concern among U.S. officials, who fear the company will exploit technological supremacy to spy on other countries for the Chinese government.
Some Western countries are pursuing a more confrontational strategy with Huawei. The company’s chief financial officer Meng Wanzhou was arrested in Canada in 2018 at the request of U.S. government officials, according to The New York Times. The U.S. government is currently fighting to have Wanzhou extradited to face charges of corruption, stealing trade secrets and violating international sanctions on Iran. Huawei has rejected the accusations and plans to fight her extradition.
All these concerns have led high-ranking U.S. officials to make strong statements against the growing business empire of Huawei, urging allies like Canada, United Kingdom, Australia, and New Zealand—the so-called Five Eyes intelligence grouping—to shun Huawei. As Canada and United Kingdom consider the financial cost of rejecting business with Huawei, Australia has already sided with the U.S. in the tussle, banning Chinese vendors Huawei and ZTE from a 5G auction, citing national security reasons.