Government admits slip-ups in BT-Huawei deal

The government has admitted it made mistakes when approving a multi-billion pound deal between BT and Huawei ten years ago.

Huawei supplied networking equipment to BT as part of the telco’s £10 billion upgrade project, winning the contract in 2005. Although BT had notified government officials of Huawei’s interest in the contract as early as 2003, those officials didn’t flag any security concerns until 2006 – something that was investigated by a parliamentary committee.

The Intelligence and Security Committee (ISC) said it was “shocked” that the government hadn’t notified senior ministers of the deal, and slated its security safeguards. It particularly criticised Huawei’s UK facility, known as the “cell”, set up to test its own equipment for security flaws, asking how a Huawei-run operation could provide unbiased assurances about Huawei equipment.

In its response, the government has admitted that minister should have been consulted about the deal, and said it would investigate the cell’s efficacy.

“The government accepts the committee’s conclusion that the processes of considering national security issues at the time of the BT/Huawei case in 2003-06 were insufficiently robust,” it said. “In particular with hindsight, we agree that ministers should have been informed.”

Links to the Chinese military

The deal means BT used some of Huawei’s equipment during a major network upgrade project – a cause for concern as the Chinese telecoms giant is alleged to have links to the Chinese military. Its founder Ren Zhengfei was formerly a major for the military arm of the Chinese Communist Party, and the Australian government has already banned the use of Huawei’s equipment for its critical infrastructure because of spying fears. A US congressional report has also warned that any deals between Huawei and American companies could pose a security threat.

That led the parliamentary committee to probe the deal, though it provided no evidence to suggest Huawei posed a security threat. In its response, the government said it had “confidence” in the security of the UK’s networks that use Huawei’s equipment.

Huawei said it supported the government’s decision to review the cell, and that it was “open to new ideas” about security.

“Huawei shares the same goal as the UK government and the ISC in raising the standards of cyber security in the UK and ensuring that network technology benefits UK consumers,” it said.

The UK’s national security adviser, who oversees the country’s security strategy, will investigate the Huawei cell and report to the prime minister later this year.