Australia blocks China’s Huawei, ZTE from 5G development on security grounds

Huawei Technologies and ZTE Corp, the two leading Chinese telecommunications equipment providers that have invested heavily on research and development of next-generation networks, have been excluded from building Australia’s 5G infrastructure after Canberra laid out new rules.

“The government considers that the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference,” Canberra said in a 5G security guidance to Australian carriers on Thursday, without singling out Huawei and ZTE.

“This is an extremely disappointing result for consumers. Huawei is a world leader in 5G. Has safely & securely delivered wireless technology in Australia for close to 15 year,” Huawei Australia said in a post on social media.

Shenzhen-based Huawei works with all of Australia’s major telecoms network operators and more than 50 per cent of Australians use a device from the Chinese company for some part of their daily communications needs, according to a description on its Twitter account.

China expressed “serious concern” about the Australian government’s action, according to a statement on Thursday from Chinese foreign ministry spokesman Lu Kang.

“Australia should not use various excuses to artificially set obstacles and adopt discriminatory practices,” Lu said. “China urges the Australian government to abandon ideological prejudice and provide a fair competitive environment for Chinese companies operating in Australia.”

Huawei did not comment further beyond its statement on Twitter. ZTE declined to comment.

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Liang Hua, chairman at privately held Huawei, did comment on the recent Australian ban on the sidelines of the Smart China Expo in Chongqing on Thursday. He said in his conference speech that the company will “ensure that it uses data legally”, without making specific reference to Australia.

Amid the escalating trade war between the United States and China, the US government has identified Huawei and ZTE as security threats because of alleged ties to the Chinese government.

In early July, the National Telecommunications and Information Administration, an agency under the US Department of Commerce, also singled out China Mobile, saying the world’s largest wireless network operator by subscribers posed a security risk in its recommendation that the Federal Communications Commission deny its application to build its own infrastructure and provide consumer and corporate telecommunications services in the US.

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Apart from the US, Huawei has also encountered security scrutiny in other developed economies including the UK and Australia.

Last month, Huawei scored an A$136 million contract to build and maintain the digital radio systems that deliver voice and data services across Perth’s rail network in Australia, in spite of security concerns raised by some Australian lawmakers.

The deal came less than a month after it refuted claims by some Australian lawmakers that it posed a security risk, calling the criticism “ill-informed” in an open letter in mid-June. It also occurred at a time when Huawei is lobbying the Australian government not to block it from supplying broadband equipment for Australia’s 5G mobile services roll-out.

Despite Huawei’s track record in Australian 4G network development, Canberra said in the latest guidance that “5G requires a network architecture that is significantly different to previous mobile generations” and “the government has found no combination of technical security controls that sufficiently mitigate the risks.”

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Vodafone Australia, which tried out 5G equipment with Huawei, criticised the latest decision to ban Huawei from local 5G networks, with its chief strategy officer Dan Lloyd saying Vodafone has always said that national security is paramount, and the company always has and always will meet the obligations under Australian law.

“This decision, which has been dropped on the eve of the 5G auction, creates uncertainty for carriers’ investment plan,” said Lloyd, adding that the decision poses a significant change which fundamentally undermines Australia’s 5G future, according to The Sydney Morning Herald.

Optus, another local telecom operator that has tested 5G gear from Huawei, said it shares the government’s objectives of ensuring the security of Australia’s information, communications and critical infrastructure, which added that Optus has a mix of vendors in its mobile network and it remains well positioned to lead in the delivery of 5G services.