Good News for Huawei as Czechs Backtrack on Ban, Brits Go Ahead With 5G Deals

*Czech National Security Council contradicts cybersecurity watchdog and appears to walks back Huawei ban in the country

*British companies too will push ahead with trials of embattled tech-maker’s 5G offerings in nation where largest telecom operator stripped Huawei equipment from the “core” of its 4G network

(Beijing) — Telecom giant Huawei finally has some cause for celebration.

The Czech Republic has backtracked on its claim that products produced by Huawei Technologies Co. Ltd. and smaller hometown peer ZTE Corp. pose security threats, while British network operators have continued to work with the company on 5G infrastructure or announced new deals.

O2 is pressing ahead with its tests of Huawei 5G equipment and Three UK has signed a 2 billion pound ($2.52 billion) contract with the company.

Huawei has been under pressure after the U.S., New Zealand and Australia banned the company from supplying fifth generation (5G) wireless equipment to domestic mobile carriers citing security concerns.

Czech Prime Minister Andrej Babis last Tuesday ordered his government to stop using Huawei cellphones, a day after its cybersecurity watchdog, the National Cyber and Information Security Agency, warned that hardware and software made by Huawei and ZTE pose a security threat.

But there was a U-turn on Friday, when the country’s National Security Council issued a statement (link in Czech) saying the warning was not based on technical analysis, and the watchdog had no right to comment on other countries’ international political situations or legal political environment.

The council is responsible for coordinating the republic’s security issues and preparing draft measures to ensure the country’s security, according to its website.

“Bidders for critical information infrastructure or major information systems procurement should not be put at a disadvantage, if there are no serious grounds related to the national security,” the statement said. It wasn’t immediately known if the ban on Huawei phone use by civil servants had been lifted.

Over in London, O2 is set to push ahead with a planned trial of Huawei’s equipment at 200 cell sites across the British capital in January, according to the Financial Times.

O2’s rivals EE and Vodafone have already launched 5G trials using Huawei’s equipment, while another carrier, Three, has recently signed a deal with the Chinese company for its 2-billion-pound 5G network build, the report said.

Headwinds are also present in the U.K., as the biggest operator BT Group PLC on Monday saying it will rip out Huawei gear from the core part of a communications network for police and other emergency responders.

BT has also moved to strip Huawei equipment out of the “core” of its 4G network, but said it will continue to use the supplier for the less sensitive parts of the network.

In an interview last week with foreign media to weather its biggest corporate public relations crisis yet, Huawei’s Rotating Chairman Ken Hu underscored the company’s undisputed leadership in the 5G space.

Huawei has been awarded 25 commercial contracts on 5G — more than any of its competitors, Hu said.

“We're doing business in 170 countries in the world. About half of the Fortune 500 companies are using Huawei products. The majority of the top telecom operators have deployed Huawei's equipment. Our smartphones are being used by hundreds of millions of consumers worldwide,” he said.

Additional reporting by Bloomberg

Contact reporter Jason Tan (jasontan@caixin.com)