The National Cyber Security Centre (NCSC) in the United Kingdom has issued advice warning the telecoms industry against using equipment and services from ZTE. The statement comes on the same day as the United States Department of Commerce banned American companies from selling components to the company. While this event was not included in the NCSC’s advice, it did mention the $1.2 billion fine ZTE received in March after violating sanctions.
A letter circulated to network operators in the U.K. from Ian Levy, the NCSC’s technical director, says, “use of ZTE equipment or services within existing telecommunications infrastructure would present risk to U.K. national security that could not be mitigated effectively or practicably,” according to the Financial Times, which saw a copy of the letter. A brief statement published on the NCSC’s website adds that it’s the watchdog’s, “duty to highlight potential risks to the UK’s national security and provide advice based on our technical expertise.”
The NCSC’s words indicate it’s specifically targeting ZTE’s infrastructure equipment, rather than its smartphones. ZTE is the world’s fourth largest supplier of telecoms equipment, according to IHS Markit, with competitor Huawei way out in front, with more than double ZTE’s market share. Huawei is a major supplier of infrastructure equipment in the U.K., and it’s this which seems to be causing the NCSC a headache.
A special department of the Government Communications Headquarters (GCHQ) was set up in 2010 — the Huawei Cyber Security Evaluation Centre (HCSEC) — specifically to monitor Huawei’s equipment destined for use in the United Kingdom. Levy says adding another equipment supplier to HCSEC’s workload would be, “an unacceptable national security risk,” and could, “render our existing mitigation ineffective.” It’s not only concerns over overworking the HCSEC that have prompted the NCSC to issue the warning. It also mentions new Chinese laws where national intelligence agencies can establish relationships with relevant companies, and potentially commission work.
Over the past months, ZTE and Huawei have been singled out by U.S. security advisors as being potential threats to security. It’s assumed a deal between Huawei, AT&T, and Verizon may have been a casualty of these statements.