The UK’s 5G U-Turn



Britain Shuts Out Huawei Technologies


Yesterday, the British government announced that UK telecom companies will be barred from buying materials produced by Chinese electronics company, Huawei Technologies Co. The ban will take effect starting at the end of 2020. Companies in the UK will also be required to extract Huawei technology from their 5G networks by 2027.

This new policy follows restrictions placed on Huawei by the US government. In May, the US passed a rule that foreign semiconductor manufacturers could not ship products that use US-created software to Huawei without a license. This gave the US Commerce Department control over Huawei’s access to certain technology. These restrictions raised concerns about the reliability of Huawei’s products for the British government.

Rising Tensions


Relations between China and the UK have been strained recently, especially since China imposed new security laws on Hong Kong, a former British colony.

Tensions between the US and China are rising as well, and the US has also been putting pressure on EU countries to exclude Huawei from their 5G networks because of security considerations. Some US leaders have raised concerns about the Chinese government spying through 5G networks, or having the power to sabotage them. China has denied these accusations. This week, US National Security Adviser Robert O’Brien will meet with security leaders from Italy, France, Germany, and the UK to discuss these concerns.

Looking Ahead


The UK’s decision to exclude Huawei will likely delay the advancement of its 5G networks by two to three years, and will cost $2.5 billion, according to British Minister, Oliver Dowden. However, Britain has decided that reducing dependence on China is worth the cost.

Following this news, investors are looking to see which companies might step in to fill Huawei’s place. Two of Huawei’s largest European competitors are Ericsson AB (ERIC), based in Sweden, and Nokia Corp (NOK), based in Finland.

Zooming out, Britain’s decision will likely fuel more discussions about how countries can become less dependent on products from China. During the onset of the coronavirus pandemic, the world was faced with its reliance on Chinese-made PPE. As tensions between China and other nations ramp up, some countries are looking for alternative supply chains.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS071501


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender