UK commits $333 million to help carriers replace Huawei 5G: Report

UK will spend £250 million (US$333 million) to diversify its sources of 5G wireless equipment after banning China’s Huawei Technologies Co. from supplying the next-generation technology.

Huawei is set to be excluded from British 5G networks by 2027 due to security concerns, leaving phone carriers reliant on a supply duopoly of Finland’s Nokia Oyj and Sweden’s Ericsson AB.

Around £50 million ($67 million) of the total will be spent next year to help build “a secure and resilient 5G network” according to documents published on Wednesday as part of Chancellor of the Exchequer Rishi Sunak’s spending review.

The resulting reduction in competition could hurt security and push up prices, so Digital Secretary Oliver Dowden has started a task force to increase the number of suppliers. He is set to publish more details before the end of the year.

UK’s crackdown on Huawei came in July after UK officials said US sanctions made it impossible to verify the security of Huawei’s supply chain.

The White House accuses Huawei of being a security risk, which the company has always denied.

Since then, Nokia and Ericsson have already won major contracts from British carriers like BT Group Plc and CK Hutchison Holdings’ Three UK.

The phone industry is banking that longer-term initiatives such as OpenRAN – a project to make mobile network equipment more interoperable and encourage new suppliers – will eventually introduce more competition.

Other large global suppliers like Korea’s Samsung Electronics Co. do not currently offer the right kind of equipment to win immediate big deals with British carriers.