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What effect could the Huawei ban have on businesses?

Chinese tech giant Huawei has been in the news for a number of reasons over the past few weeks. As well as being heavily involved in the upcoming roll out of 5G around the world, the company is also in an arms race against Samsung to be the first to get a durable foldable cell phone into the hands of the public. But amongst the reports of Huawei’s latest product releases and strides in technology, debates around the security of their devices have also been brought into question – and not for the first time.

Following fresh concerns being raised over whether Huawei devices are being used to spy on its users, alongside accusations that it stole trade secrets from US carrier T-Mobile in 2012, Huawei was banned in the US after an executive order was issued by the President.

The order permits the federal government to block US companies from buying foreign-made telecoms equipment if deemed to be a national security risk.

This has led to plenty of worry around the future of Huawei in the US, with many customers being left unsure if their cell phones will soon be unusable. Although Google has secured a temporary license to continue supplying software updates to Huawei devices, what happens when this comes to an end in August is being kept under wraps.

So, what has happened so far, and what potential effect could a long term blacklist of Huawei have on businesses and consumers in the US? TelcoCompare investigates…

Why is Huawei banned in the US?

Concerns over Huawei’s security has long been a concern in the US. In fact, what you may not know is that the timeline goes all the way back to 2012, when companies in Australia and the States were first banned from using Huawei’s networking equipment. This ban was implemented after Huawei and the multinational telecoms company, ZTE, were investigated amid concerns that their hardware contained backdoor access points which could be used by the Chinese government to gather private information.  

The result of the investigation, which was conducted by The House Intelligence Committee, concluded that their hardware could undermine national security in the US.

Since then, the question of whether Huawei devices were being used to spy on users has been debated countless times. In 2013, it was found that Huawei’s own staff were auditing its equipment for security holes, rather than GCHQ (Government Communications Headquarters). Later, in 2017, T-Mobile sued Huawei, alleging that they had stolen trade secrets about a phone-testing robot.

In December 2018, Huawei’s CFO Meng Wanzhou (who is also the daughter of the company’s founder) was arrested after being accused of violating sanctions pertaining to Iran. These allegations dated back to at least 2016, with Huawei being alleged to be shopping products that originated in the US to Iran.

More recently, in January of this year, a Huawei employee was arrested (and later dismissed from his job) for allegedly spying on behalf of China. However, it was deemed that his actions had “no relation” to Huawei.

Later that same month, the US Department of Justice charged Huawei with theft of trade secrets (from T-Mobile), as well as wire fraud and obstruction of justice. This charge includes allegations that Huawei offered bonuses to employees for stealing confidential information from other companies. In April, it also came to light that routers and other Huawei equipment used by Vodafone had hidden backdoors. Both companies said the vulnerabilities were addressed in 2011 and 2012.

These are just some of the key events that led to the US President effectively banning Huawei with a national security order on May 15, 2019. Since then, chip designer Arm will not do any new work with the company, while Facebook has stopped letting Huawei preinstall its apps.

Potential effects of the Huawei ban

One of the biggest concerns facing Huawei’s business and commercial users is that the security of their devices will be jeopardized. From August 2019, Huawei will no longer have access to Google’s security updates, leaving devices more vulnerable to cybersecurity threats. This will be particularly harmful to businesses as they face substantial financial loses and a hit to their reputation if they do fall victim to a data breach of any size.

Fortunately, it appears that the company is prepared for this. In case their access to Google’s services are completely removed, the controversial tech giant is reportedly creating and trademarking its own operating system (OS) called “Hongmeng”. In addition to this, Huawei has already created its own app store, called App Gallery, which is present on many Huawei and Honour devices. It is thought that this could soon compete with the Google Play Store.

Despite this, there are still concerns about how a change of OS will affect the performance of Huawei’s devices, and thus, their position as one of the world’s most popular smartphone makers. As their own OS will be a completely new system, there are worries that it may not offer the same level security as Google’s tired and tested systems.

However, it is still yet to be seen if the Huawei ban will become a permanent fixture – particularly with Google still rolling out software updates to UK devices, and customers all over the world currently still being able to use their Huawei phones as normal.

June 30, 2019