The UK has decided to let Huawei continue to be used in its 5G networks but with restrictions, despite pressure from the US to block the firm.
The Chinese firm will be banned from supplying kit to “sensitive parts” of the network, known as the core.
In addition, it will only be allowed to account for 35% of the kit in a network’s periphery, which includes radio masts.
And it will be excluded from areas near military bases and nuclear sites.
Downing Street said that Boris Johnson had spoken to President Trump to explain the move.
“The prime minister underlined the importance of like-minded countries working together to diversify the market and break the dominance of a small number of companies,” it said.
US Secretary of State Mike Pompeo had previously suggested that use of Huawei’s equipment posed a spying risk, saying that “we won’t be able to share information” with nations that put it into their “critical information systems”.
But the Foreign Secretary Dominic Raab has said the decision would not affect the UK’s intelligence-sharing relationship with the US and other close allies.