Thursday 18th July 2019
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Huawei Technologies won’t turn its back on New Zealand, even if it can’t convince the government that it’s not a front for Chinese spies.
The New Zealand government is coy on the Chinese telecommunication giant's offer to sign a ‘no spying, no backdoors’ commitment with any country.
The Shenzhen-based equipment maker made the offer when launching its 2018 corporate sustainability report as it attempts to shed US-led claims that its technology is used by Chinese authorities to spy on rival nations.
Huawei has been deeply engaged in New Zealand’s industry since it built Two Degrees Mobile’s network. It was subsequently tapped by Telecom, now Spark New Zealand, to replace the $574 million XT network that was beset with problems when it launched in 2009.
However, the Chinese firm’s involvement in building the local 5G network is uncertain with Spark’s application rejected by the Government Communications and Security Bureau on national security grounds.
Huawei chair Liang Hua last week told international media, including two New Zealand reporters hosted by Huawei, that the company has never been asked to collect foreign intelligence and has always complied with the law of the land it operates in.
“We will never allow anyone to install backdoors into our equipment,” he said via a translator.
Andrew Little, the minister responsible for GCSB, has previously said it’s up to Spark to figure out whether it can mitigate the issues raised by the intelligence agency. His office stuck to that script in an emailed statement that didn’t directly address whether Huawei’s offer would allay security concerns or be something that the government would consider.
“Decisions taken by the GCSB under the Telecommunications Interception Capability and Security Act (TICSA) are on a case by case basis and take a vendor-agnostic and country-agnostic approach.
“The regulatory process under TICSA is with Spark. It is up to Spark to determine if they can mitigate the network security risks identified by the GCSB.”
If the proposal can’t mitigate such security concerns, the GCSB may pass the issue on to Little, who must take into account the impact on the network operator meeting of the cost of the decision, potential consequences on competition and innovation in the market, and the anticipated benefits of improving network security risk.
Andrew Bowater, Huawei New Zealand's deputy managing director, said the dispute is about bigger geopolitical issues. But the firm would readily make a ‘no spying, no backdoor’ commitment given there's no evidence of any wrongdoing in the 13 years they've operated locally.
“We’d happily sign up to that tomorrow because we back ourselves to not do anything stupid in the market,” he said.
US scepticism about tech firms’ links with Chinese authorities isn’t limited to Chinese firms. This week, Facebook investor and Palantir co-founder Peter Thiel called Google’s relationship with the Chinese military “treasonous”. He wants to see a federal investigation into the firm's refusal to work with the US military.
Bowater said the reality of 5G is a number of years away, and that earlier generation technologies will be used for some time.
“We’ll continue to support our customers. We’re not going to throw our toys out of the cot or anything like that, but we certainly wouldn’t like New Zealand to be just left with a glorified 4G network.”
Spark backs Huawei because it has the best quality product and fastest service, and isn’t going to put its own business at risk by partnering with “some crazy vendor,” Bowater said.
“That’s why they continue to hold strong with us in an attempt to get something across the line.”
Spark wants to have a 5G network up and running by July next year and attempted to assuage investors by saying it’s adopted a multi-vendor approach to the new generation of mobile technology.
New Zealand's biggest telecommunications company uses Huawei for its radio access network - essentially the cell towers - but not its core network, which directs services over that infrastructure. Spark's core network was built by Cisco and Ericsson, with the telco keeping different vendors on its books for commercial reasons.
It estimates its current capital spending policy of 11-12 percent of revenue – currently around $410 million a year – should be enough to build a 5G network.
Earlier this year, the Commerce Commission warned that excluding Huawei, or any supplier, could affect the development of competition and the cost of deploying a 5G network.
(Disclaimer - Paul McBeth travelled to China courtesy of Huawei Technologies)
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