How Huawei's European growth started in the UK

On Tuesday, the UK government announced its decision to ban mobile providers from buying new 5G Huawei equipment from 31 December, while ordering the removal of the Chinese company's kit from its 5G network by 2027.

The decision was taken following a warning from the U.S. that Huawei could compromise national security by using its presence in the UK to spy on the country and potentially promote cyber-attacks – claims Huawei firmly denies.

The UK's digital secretary, Oliver Dowden, says the move will delay the roll-out of 5G in the UK by "two to three years" and cost an estimated £2 billion ($2.5 billion) – while causing potentially irreversible damage to Huawei's reputation.

On Tuesday, the UK's digital minister, Oliver Dowden announced the decision to ban Huawei from its 5G roll-out over national security fears. /AP

Huawei's growth

Since its launch in 1987, Huawei has established itself as the world's biggest supplier of telecommunications equipment – the technology that connects smartphones to networks.

In 2019, the firm was the world's second biggest manufacturer of smartphones behind Samsung and ahead of Apple. According to research conducted by Counterpoint, Huawei sold more phones in April 2020 than any other brand, with a 21.4 percent share of the global market.

The company now operates in 170 countries and employs 194,000 people but much of its international success has been the result of its relationship with the UK.

Huawei in the UK

Huawei runs its international operations from the UK, where it opened its first office in 2001 and now employs 1,500 people. In April 2005, it was awarded a contract by BT as part of a $12 billion project to help modernize the British firm's mobile network and merge existing technologies.

That contract served as a foothold for Huawei to enter the European market and subsequently build its global reputation. In 2018, it was reported that the Chinese company made three percent of the equipment used by O2, as well as a third of that used by Vodafone.

Huawei has produced much of the equipment used in 2G, 3G and 4G networks in the UK and Europe. It holds a 65 percent market share of EE's 2G and 4G wireless access networks and occupies a 50 percent market share of Vodafone's 2G, 3G and 4G networks.

Huawei opened its first UK office in 2001 and now employs 1,500 people at its UK headquarters in Reading, which runs the company's international operations. /AP

Huawei and 5G

Huawei has the highest market share of base stations for 5G networks in Europe – the towers that receive signals from smartphones and connect them to mobile networks.

The 5G networks are built on top of this existing equipment, which means it will take years for the UK to strip out and replace Huawei's kit with parts from other companies and will cost networks billions of dollars.

Prior to Tuesday's announcement, Huawei was set to produce 35 percent of the equipment used in the building of the UK's 5G network, but now a host of rival 5G suppliers, such as Samsung, Nokia and Ericsson, are expected to step in and assume Huawei's role.

Other European countries are also re-evaluating their relationship with the firm. According to Reuters, Germany is expected to make a decision in September, but Deutsche Telekom, Huawei's largest customer in Europe, has argued strongly against blanket bans on individual foreign vendors.

In Italy, Telecom Italia has excluded Huawei from a tender for 5G equipment for the core network it is preparing to build in Italy and Brazil.

Meanwhile, the head of French cybersecurity agency ANSSI ruled out a total ban on Huawei equipment for 5G networks in a newspaper interview on Sunday, but said French companies were being encouraged to avoid switching to Huawei.