LONDON – Authorities in the United Kingdom are increasingly concerned that Huawei Technologies hasn’t fixed a software issue in its telecommunications equipment months after a British lab flagged it, souring the Chinese company’s ties in one of its most important foreign markets.
The matter is technical, involving a discrepancy in the software being tested in the lab and the software actually being used in telecom gear.
That makes it harder for the lab to ensure Huawei gear doesn’t contain security holes that any hacker could exploit, according to people familiar with the matter.
The UK publicly flagged the potential problem in July, citing Huawei’s engineering “shortcomings.”
Before the warning, UK authorities said for years they had sufficiently mitigated the risk of using Huawei equipment in British telecom networks.
In recent months, the situation has become more tense.
UK officials have briefed counterparts in Australia, who agree the software issue is a significant problem, according to a senior intelligence official there.
Australia banned Huawei gear from being used by carriers in their next-generation networks.
Last month, a British cybersecurity official stormed out of a meeting with Huawei in frustration over the Chinese company’s perceived sluggishness at addressing the technical problems, a person familiar with the matter said. Reuters first reported the incident earlier this month.
The UK’s turnaround, and the rare display of public pique in the relationship, has been magnified as Huawei defends itself against growing scrutiny around the world.
For more than a decade, Britain has been one of Huawei’s most important markets, and its embrace of the company had been seen as a vote of confidence by a Western power.
BT Group, which runs the country’s biggest wireless carrier by subscribers, was one of Huawei’s first big customers outside Asia.
Amid Huawei’s tension with the UK government, BT said this month it would remove some of the Chinese company’s equipment, though it said the move was part of a long-planned infrastructure upgrade.
The United States government, meanwhile, has been trying to persuade allies to join its campaign to blacklist Huawei, the world’s biggest telecom-equipment manufacturer and No. 2 smartphone maker.
The US says Huawei poses risks on the grounds that Beijing could order the company to tap into the hardware it makes to spy or to disable communications networks.
Huawei says it is an employee-owned company and would never carry out such an attack because it would be “corporate suicide.”
It says it poses no greater risk than Western rivals that also have major operations in China.
One part of Huawei’s strategy to assure governments: It has promised to set up and fund labs in individual countries so that governments or third parties can test its hardware and software for themselves.
It opened one in England in 2010 and last month opened second in Germany.
The UK lab, outside Oxford, is staffed and funded by Huawei but overseen by an independent board that includes representatives of both Huawei and the UK government.
There, researchers with UK security clearances try to recreate from scratch the software that is in Huawei telecom equipment currently in use in major British telecom networks. Doing so helps the researchers identify security flaws.
The lab doesn’t necessarily test the equipment’s software before it gets used in the real world.
The board, in its annual report released in July, found that the facility couldn’t necessarily re-create the software actually used by Huawei equipment.
In essence, the lab was vetting software that was different than the software actually running in equipment across the country.
Last week, Huawei publicly pledged $2 billion over five years to overhaul its global engineering.
Part of that will go to address the UK government’s concern, according to a person familiar with the matter.
The company promised to write a letter to British cybersecurity authorities explaining how it would do so, people familiar with the matter said.
Britain has also begun a broad review of the country’s telecom-equipment supply chain, a review industry executives said was targeted at Huawei.