The UK government has decided to allow Huawei a limited role in building 5G infrastructure in the country. The UK has been under pressure, especially by the US, to exclude Huawei from 5G infrastructure deployments. But after a lengthy review, delayed by the December election, it is allowing Huawei to continue as an infrastructure provider, but with the following conditions:

• Huawei will not be able to provide various core network functions or be used in sensitive geographic areas
• Huawei's share of any equipment type will be limited to no more than 35%

The UK government has always considered Huawei a 'high-risk vendor', but continues to believe that the risk of using Huawei equipment is manageable, provided its role is limited and that it is not allowed in sensitive parts of the network or country. The UK has, for many years, required Huawei to pay for a laboratory where Huawei's equipment is carefully tested to assess its level of security threat. It has not been able to find anything that resembles a 'back-door' that would allow, for example, the Chinese government to intercept sensitive communications. It has, however, found considerable security vulnerabilities in the quality of Huawei's software and cyber-security measures. In response, Huawei said it would invest two billion dollars to tighten the level of security. Nevertheless, concerns are less about Chinese government eavesdropping and more to do with the potential for a rogue actor to take down communications networks, partially or completely. Given the fundamental role that 5G will one day play in connecting much of daily life, this poses a threat that needs to be managed. However while the UK government pondered the decision, three out of the the UK's four mobile network operators had already started rolling out their 5G networks using Huawei infrastructure. This is unsurprising as Huawei is also a supplier of many 4G networks and there's a synergy in using the same provider for both systems. Indeed, one of Huawei's advantages in its approach to 5G is its ability to pair aspects of both 4G and 5G to drive faster and more cost-efficient deployments. Network operators have been vocal in their desire to keep Huawei as a supplier, citing issues of technology superiority and cost. If Huawei would have been prevented from participating in 5G, operators claimed it would have resulted in delays to network roll-outs of several years and substantial increases in cost. Lobbying from telecom operators has likely been multiplied by lobbying from inside Huawei; several former members of the UK government now serve in various roles within Huawei, including Lord Browne - who is Chairman of Huawei UK. The decision will have come as a relief for Huawei; other countries were observing the UK and are likely to follow its lead. But the relief is likely only partial because its continued identification as a high-risk vendor means it will struggle for the sort of market position it might otherwise have enjoyed. And while the decision delivers some clarity on Huawei's future role, there are aspects that will need to be handled carefully. One being how to define exactly what constitutes the core of the network. To deliver the benefits that 5G promises, more and more of the core functionality of the network will be distributed closer to the edge of the network, where Huawei will likely be allowed to play a role. And mixing different vendors' solutions may limit the extent to which a network can realize the full capabilities of 5G. In practice, the restrictions outlined will likely limit Huawei to participating only in the radio access network (RAN). And some operators may have already exceeded the 35% rule and will need to plot a course to reducing their dependence on Huawei within the next three years. Ericsson, Nokia and Samsung will be pleased that Huawei's hands have been tied, but it's perhaps less than they might have been hoping for. There is no relief for ZTE, which is effectively banned from the UK. The UK government has been wrestling with a complex strategic calculation. Its closest ally is the USA, which has been pushing hard for an outright ban on the use of Huawei equipment. The UK has also likely been trying to keep China at least partially on-side. The uncomfortable truth is that it will need to forge trade agreements with both nations following Brexit. It is gambling that this conditional acceptance of Huawei will be enough to mollify Beijing without completely distancing the US. It may not have managed either.