Government accepts recommendations of diversification report on telecoms supply chain

The Telecoms Supply Chain Diversification Advisory Council has issued its report and the Government has announced it accepts the recommendations and acknowledges that the previous Government has started to take steps to address risks in the telecoms supply chain.

The big headline items we’ve seen previously addressing risks to both the supply, operation and security of telecoms networks in the UK are the removal of Huawei from the UK 5G infrastructure which is set to complete in 2027 and the forced sale of the FTTP operator Upp who were bought by Virgin Media O2/nexfibre.

The primary mission of this government is to drive economic growth. Delivering on this mission means ensuring that individuals and businesses have access to high-quality connectivity, which serves as the foundation of our modern, digital economy. It is now almost as vital as electricity and water.

Given this reliance, it is essential that the technologies delivering our connectivity are secure and resilient. This includes ensuring that we have a healthy, competitive telecoms supply chain – both to drive innovation and to avoid the risks that may arise from acute market concentration. In the broader digital sector, last year’s Crowdstrike incident, which led to IT outages world-wide, showed just how disruptive it can be when something goes wrong with a supplier to which we have high exposure.

The previous government took steps to begin addressing these risks in the telecoms supply chain, but government and industry still have more to do. I am grateful to the Telecoms Supply Chain Diversification Advisory Council for their report.

I accept the Council’s recommendations and in this response outline how the government will take action to implement them across the short, medium and long term.

We do not see any trade-off here between security and growth. They are mutually reinforcing.

With a strong research base in telecoms that ranks as the third in the world and a range of existing and emerging suppliers of advanced connectivity solutions already based here, we believe the UK can be a leading place for the development of these technologies.

Extract from Ministerial foreword by Sir Chris Bryant MP, Minister of State for Data Protection and Telecoms

There are three time lines to the Governments response to the diversification report:

1. Near time i.e. next 3 years where the aim is to strengthen collaboration with MNOs and vendors
2. Medium term  i.e. next 5 years with a push for greater openness and interoperability for hardware and software in the telecoms market
3. Long term i.e. over the next 10 years prevent repeats of the past where too much reliance was placed on one vendor by increasing the UK industrial capacity with regards to connectivity technologies.

One area identified is that while the UK led on lots of 5G research the actual manufacture ended up with vendors overseas, and as the race towards 6G deployment is underway the Government wants to support more home grown manufacturing or at least vendors from other like-minded countries.

Some of the problem has been that while skills exist in the research sphere the expertise in manufacturing has been eroded over decades and therefore it will need to be a long term goal to generate those skills while also supporting a manufacturing base. 

One aspect of the UK is that globally it is a small market, and purchasing decisions are often made at the pan-European level to get scale and therefore working with international partners is going to be key going forward. In short there is the recognition that this is not about building UK mobile and fixed telecoms network with solely UK sourced hardware but colloboration will be needed and this can also be used to help reduce barriers for new entrants to the market.