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UK defense minister admits 'grave concerns' over Huawei 5G equipment

Key Points
  • U.K. Defense Minister Gavin Williamson has reportedly said he wants to evaluate Huawei’s involvement in Britain’s 5G rollout.
  • His comments come as Donald Trump is reported to be considering a ban on U.S. companies being permitted to buy equipment from Chinese telecoms firms.
  • A cybersecurity expert told CNBC Thursday that Europe would eventually be forced to weigh in on the debate.
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Why the US thinks Huawei is a massive national security threat

Britain's defense minister has reportedly voiced "grave" concerns over Huawei's role in the rollout of the U.K.'s 5G network.

Gavin Williamson is the first U.K. cabinet minister to speak out against the telecoms giant, according to British newspaper The Times, which reported Thursday that he believed using Huawei's 5G equipment may enable Chinese espionage.

"I have grave, very deep concerns about Huawei providing the 5G network in Britain. It's something we'd have to look at very closely," Williamson reportedly said.

"We've got to look at what partners such as Australia and the U.S. are doing in order to ensure that they have the maximum security of that 5G network and we've got to recognize the fact, as has been recently exposed, that the Chinese state does sometimes act in a malign way."

A spokesperson for the Ministry of Defence confirmed Williamson's comments to CNBC over the phone.

Superfast 5G mobile internet is expected to revolutionize the digital economy by enabling new technologies such as self-driving cars and the internet of things.

A spokesperson for Huawei told CNBC via email: "Cybersecurity is Huawei's number one priority, and an area in which we are investing heavily. We fully agree with the need to ensure the security and integrity of national networks. As a responsible company and a significant investor in the UK, we welcome dialogue with the British government and with the rest of the industry, as long as it is based on facts and on demonstrable evidence."

'Risks to consider'

James Chappell, co-founder and chief innovation officer at analysis firm Digital Shadows, told CNBC's "Squawk Box Europe" Thursday that the EU would eventually be pulled into the debate.

"As countries become manufacturers of devices and technologies themselves, those technologies get pulled into these geopolitical debates, so this will continue," he said.

"America exports a large amount of telecoms equipment, as does Europe, so I expect we'll see places where American and European equipment is affected by these geopolitical movers. We haven't seen Europe get so involved in (these) decisions, but someone's going to have to decide at some point what they're going to do because there are some risks to consider."

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Huawei 5G risks must be considered in Europe, cybersecurity expert says

Meanwhile Pelham Smithers, managing director of Pelham Smithers Associates, told "Squawk Box Europe" Thursday that it was "very dangerous" to put Huawei equipment into 5G infrastructure.

"It's less of a problem at the consumer side, but at the service provider end everyone's worried," he said. "Maybe the problems will be resolved with Huawei, but for the time being I think telco companies are going to invest and they are going to be looking to providers like Nokia, NEC and Samsung."

Following suit

Williamson's comments to The Times came as reports emerged that President Donald Trump is considering an executive order in 2019 to ban U.S. businesses from buying equipment made by China's Huawei and ZTE. Like Huawei, ZTE has also previously denied allegations its products are used to spy.

The U.S. was the first of the Five Eyes security alliance to ban Huawei from providing equipment for its national 5G rollout. Australia and New Zealand have since made the same decision, leaving Canada and the U.K. as the only members not to have done so.

However, the U.K.'s spy chief said in a speech this month that the inclusion of Chinese telecoms firms in 5G networks needed consideration.

Earlier this month, British telco firm BT said Huawei would not be eligible to provide equipment for its core 5G network – although a spokesperson told CNBC this was not related to security concerns.

World's biggest 5G provider

Despite growing international restrictions, Huawei is set to report a rapid pace of growth for the year.

The company's rotating chairman Guo Ping said in his new year's address to employees that Huawei expected to record a 21 percent jump in revenue for 2018 to $109 billion — its fastest pace of growth in two years.

He also told workers that Huawei had secured 26 5G contracts, making it the largest 5G vendor in the world, according to Reuters.

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