UK plans diversification of telecoms supply chain

posted by Lucy Patchett
23 July 2019

The UK government has created a strategy to diversify the telecommunications supply chain due to the risks of dependency on single suppliers.

Nokia, Huawei and Ericcson are global leaders of the telecoms equipment market, with Huawei dominating a 35% share of the 4G mobile access market, said the UK Telecoms Supply Chain Review Report. This suggests dependency on high risk single suppliers could have “significant security and resilience risks” for telecoms networks.

As part of a strategy to diversify the supplier base the government will set industrial policies to encourage “the entry and growth” of new vendors, and increase opportunities for new entrants through research and development such as the £200m 5G Testbeds and Trials Programme.

The government has not yet made final decisions on the involvement of Huawei in the provision of the UK’s 5G network, said Jeremy Wright, secretary of state for digital, culture, media and sport, because more information is needed to understand the impacts of the US government’s recent move to blacklist Huawei.

There is likely to be a “significant increase in the use of Huawei equipment for 5G access networks overall compared to the use of its equipment in current (3G/4G) networks,” said the report.

Wright said during a speech to the House of Commons: “We must have a competitive, sustainable and diverse supply chain if we are to drive innovation and reduce the risk of dependency on individual suppliers. The government will therefore pursue a targeted diversification strategy, supporting the growth of new players in the parts of the network that pose security and resilience risks.”

The report outlines a security framework, focusing on three areas of action. This includes establishing a set of security requirements, new legislation that will enable telecoms watchdog Ofcom to enforce requirements, and management of security risks posed by the supply chain.

New Telecom Security Requirements (TSRs) will raise operators' security standards against cyber security risks of certain 5G and full fibre network suppliers. Operators will assess suppliers through strict procurement and contract management and suppliers will also be required to follow TSRs, said the report.

The government and Ofcom will oversee compliance with the security framework and oversee supply chain risk assessments until new legislation is passed.

In 2018, the Chinese telecoms supplier Huawei faced US allegations that the Chinese government were spying using its 5G network. The US banned the use of the company’s services due to national security risks, prompting concerns worldwide. Australia, and New Zealand also blacklisted Huawei equipment. The UK government agreed to assess security risks within its telecommunications supply chain and Huawei’s involvement as part of the Future Telecoms Infrastructure Review.

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