British telcos may be fined 10% of revenues for using Huawei gear under new law

KEY POINTS

• British telcos could face large fines if they fail to tighten security in their networks under new legislation being announced Tuesday.
• The proposed Telecommunications Security Bill is designed to improve security in the U.K's 5G and full-fiber networks.
• Notably, the bill gives the government the power to fine operators if they use Huawei equipment in the nation's 5G networks.

A smartphone with the Huawei and 5G network logo is seen on a PC motherboard in this illustration picture taken January 29, 2020.

Dado Ruvic | Reuters

LONDON – British telcos could face large fines if they fail to tighten security in their networks under a new law being announced in Parliament on Tuesday.

The proposed Telecommunications Security Bill is designed to improve security in the U.K's 5G and full-fiber networks. Under the bill, network operators must ensure the equipment and software used at phone mast sites and telephone exchanges meets certain standards.

"This will be a significant step to protect the U.K. from hostile cyber activity by state actors or criminals," the Department of Culture, Media, and Sport said in a statement. "Over the past two years the government has attributed a range of cyber attacks to Russia and China, as well as North Korea and Iranian actors."

If the bill is passed, the government said it plans to fine telecoms firms up to 10% of turnover or £100,000 ($133,000) a day if they fail to comply with the rules.

Digital Secretary Oliver Dowden said the bill "will give the U.K. one of the toughest telecoms security regimes in the world and allow us to take the action necessary to protect our networks."

Notably, the bill gives the government the power to fine operators if they use Huawei equipment in the nation's 5G networks.

In July, the government said carriers won't be able to buy equipment made by the Chinese tech giant from the end of 2020 and they must strip any existing Huawei equipment out of their networks by 2027.

Huawei denies that its equipment presents a national security risk to the U.K. or any other country.

Huawei Vice President Victor Zhang said in a statement: ''It's disappointing that the government is looking to exclude Huawei from the 5G roll out."

Zhang added: "This decision is politically-motivated and not based on a fair evaluation of the risks. It does not serve anyone's best interests as it would move Britain into the digital slow lane and put at risk the government's levelling up agenda."