Specific and targeted interventions necessary to ensure UK mobile tech diversification

As the UK government attempts to deal with the ramifications of its decision to exclude Huawei from the country’s mobile communications technology market, its telecoms diversification task force has revealed the steps it says are needed to ensure diversity and stimulate supply in the market.

In December 2020, as it gave a second reading of the legislation necessary to show how it would mandate the UK’s telecoms operators to uninstall essential technology from so-called high-risk vendors such as Huawei from their 5G infrastructures, the UK government also revealed the new partners and strategy for how it will try to diversify the country’s telecoms supply chain and ensure its future resilience.

The background of the new legislation is the decision in July 2020 by the UK government to commit to a timetable for the removal of Huawei equipment from the country’s growing 5G communications infrastructure by 2027 – effectively a huge U-turn to the decision it took in January 2020 to restrict Huawei’s presence to just the radio access network (RAN) element of 5G setups.

The UK government made it illegal for UK telcos to purchase Huawei 5G network equipment from the end of 2020. Yet, as soon as it made its decision, the UK government conceded there would be a price to pay – calculated by the UK’s mobile operators to be running into the billions.

The diversity strategy set out a number of targeted measures revolving around three key pillars: supporting incumbent suppliers, which will continue to be a major part of the UK market and help the UK meet its ambitious digital infrastructure plans; attracting new suppliers into the UK market; and accelerating open-interface and interoperable technologies such as Open RAN.

The strategy also included funding a new Open RAN trial with Japanese telecoms supplier NEC. The NEC NeutrORAN project will be based in Wales and will aim to see live 5G Open RAN in the UK this year, testing solutions to deploy 5G networks in the most cost-effective, innovative and secure way.

The strategy also saw former BT CEO and former trade minister Ian Livingston appointed chairman of the telecoms diversification task force, designed to provide independent advice on how to boost competition and innovation in the UK telecoms market and build an open, sustainable and diverse supply chain.

The task force’s report which has just been published will support the government as it delivers its £250m diversification strategy, mitigating the resilience risks to 5G networks ahead of the 2027 deadline for removing Huawei kit so people can have confidence accessing the economic and social benefits brought by 5G.

The report concluded that successful diversification would require specific and targeted interventions to stimulate the supply market, de-risk the integration of new suppliers into operator networks and lay the foundations for long-term market growth and increased supplier competition.

The task force’s overall view was that direct funding for operators to adopt new suppliers or Open RAN into their networks was unlikely to be a sustainable approach to achieving diversification in the long term, based on the task force’s view of current market conditions. Instead, it said the government could derive best value for money by directing funding to support or incentivising research and development activity in this area, catalysing the UK ecosystem and removing barriers to entry.

It added that the government needed to consider the case for funding activities that move the market in the right direction, but should be careful and measured in how it does so to ensure it prioritises promoting healthy, sustainable and competitive behaviours where the UK can participate in the supply chain.  

In addition, the support said that due to the specific measures proposed, the government should take steps to ensure policy interventions and investment can be most effective. Steps to be taken are greater cross-government coordination of telecoms activity, clear signposting for prospective suppliers and investors, and bringing more clarity to the role and responsibility of the regulator with regards to diversification.