Huawei says it is moving forward with a "company-wide transformation program" in the United Kingdom to address security concerns, after the Chinese telecommunications company was criticized in a report on Thursday.
An oversight board that monitors Huawei activity in the UK said it can only provide "limited assurance" that all national security risks stemming from Huawei's involvement in the UK's critical networks can be "sufficiently mitigated long-term".
The report casts doubt over the Chinese telecommunication company's involvement in setting up fifth generation -- or 5G -- networks in Britain.
The Huawei Cyber Security Evaluation Centre Oversight Board, which includes officials from the UK National Cyber Security Center, had voiced similar concerns in July, prompting Huawei to commit $2 billion to improve its mobile and internet network systems in the UK.
But in its latest report the oversight board said "no material progress" has been made to address the issues outlined in the July report.
It also said that "further significant technical issues have been identified" in Huawei's engineering processes, leading to "new risks in the UK telecommunications networks".
The board went on to say that the oversight it provides is "arguably the toughest and most rigorous in the world" and that the report does not therefore "suggest that the UK networks are more vulnerable than last year".
Responding to the report, a Huawei spokesperson told China Daily that the company "understands the oversight board's concerns" and "takes them very seriously".
"The issues identified in the oversight board report provide vital input for the ongoing transformation of our software engineering capabilities," the spokesperson said. "In November last year Huawei's board of directors issued a resolution to carry out a companywide transformation program aimed at enhancing our software engineering capabilities, with an initial budget of $2 billion."
Huawei added: "A high-level plan for the program has been developed and we will continue to work with UK operators and the National Cyber Security Center during its implementation to meet the requirements created as cloud, digitization, and software-defined everything become more prevalent. To ensure the ongoing security of global telecom networks, the industry, regulators, and governments need to work together on higher common standards for cyber security assurance and evaluation."
The latest report raises fresh questions as to whether British network providers will field bids from Huawei to build 5G infrastructure.
UK operator BT has already confirmed it will not consider bids from Huawei. The Chinese company still remains active in Britain's 5G market, having conducted technology trials with both Vodafone and Three last year.
The report also increases speculation that the British government may move to ban Huawei from taking part in 5G auctions, as some other nations have already done.
In a United States-led boycott of the company, Japan, Australia, and New Zealand have all effectively barred Huawei from participating in domestic 5G network tenders.
Members of the German interior and foreign ministries have reportedly urged the government to reconsider allowing Huawei to participate in 5G auctions expected this year.
The European Union has said it will increase scrutiny on Chinese telecommunications companies following the actions of its allies.
Gavin Williamson, the UK defense secretary, has voiced "deep concerns" about Huawei providing 5G network kit in Britain.
And Alex Younger, the head of the UK's Secret Intelligence Service, which is also known as MI6, said the government should second guess Huawei's participation.
Last month, Huawei Chairman Guo Ping refuted claims that the company's involvement in global 5G rollout poses a security threat.
Guo denied allegations made by the United States that the company has assisted the Chinese government in espionage.
"Huawei has not and will never plant backdoors," Guo said. "And we will never allow anyone else to do so in our equipment."
In January, Wu Qian, spokesman for China's Ministry of National Defense, lamented the "groundless allegations" levelled against Huawei, saying that British authorities had exhibited "deep-rooted pride and prejudice" when questioning the company's involvement in tenders.
