Government pledges millions to diversify UK 5G supply chain 5G

The government has committed £250 million towards the diversification of the UK’s telecoms equipment supply chain following the decision to ban Huawei from the rollout of 5G earlier this year.

Under the new rules, operators will be banned from buying telecoms equipment from Huawei by the end of the year and will also have to strip out existing 5G kit made by the company by 2027.

This is despite the fact that no evidence has ever been produced to support claims of wrongdoing, while the company has persistently denied any such allegations.

UK 5G supply chain

Operators have reluctantly accepted the new reality but the government itself has suggested the U-turn could delay 5G rollout by up to three years and add £2 billion of additional costs to operators. Ericsson and Nokia would have a virtual duopoly in the market for radio 5G kit, leading to concerns about competition, innovation, and supply.

Chancellor Rishi Sunak’s spending review confirmed that £50 million of the total sum would be made available next year and will likely be used to encourage new vendors to enter the UK market.

Samsung, NEC and Fujitsu have all been touted as potential suppliers in the past, while the government is also keen to stimulate the development of open networking technologies like Open RAN, believing the market would benefit from the innovation of startups.

A taskforce comprising industry and academic leaders and chaired by former BT CEO Lord Livingston has already been established and will look to influence government legislation and frameworks.

Operators have already started the process of finding alternatives to Huawei gear, with draft legislation suggesting they could be fined up to £100,000 a day for non-compliance with the ban.