Huawei issues urgent 'please explain' note to NZ govt

Thursday 29th November 2018

Chinese telecommunications equipment provider Huawei says it has had no contact with New Zealand's signals intelligence agency over its decision to stop Spark New Zealand using the company's cellsite technology when it builds its 5G mobile network.

"At this stage the GCSB and ministers have not engaged with Huawei in this process. In the interests of natural justice and fairness, Huawei is seeking an urgent meeting with the relevant ministers and officials to understand the government’s position and get clarification of the process from here," Huawei NZ deputy managing director Andrew Bowater said in a statement.

The company had had no formal notification or contact from the Government Communications Security Bureau, which assessed an application from Spark to use Huawei equipment in the Random Access Network parts of the 5G network that it aims to have up and running by July 2020, assuming the government allocates 5G radio spectrum promptly next year.

Both the GCSB and the minister responsible for the country's intelligence agencies, Andrew Little, have made a point of saying the declined application from Spark is a "soft" rather than "hard" ban, leaving open the possibility that the national security risks identified by the GCSB can be mitigated.

"Huawei would welcome the opportunity to actively address any concerns and work together to find a way forward," said Bowater.

The decision has occurred in an environment of increasing trade and diplomatic tension between China and the US, which along with Australia has banned the use of Huawei in its mobile telecommunications networks. Both countries are members of the Anglophile global communications spy network known as the Five Eyes, of which New Zealand, the UK and Canada are also members.

In comments issued ahead of this weekend's G20 summit meeting in Argentina, where US President Donald Trump and Chinese president Xi Jinping are scheduled to have dinner together, Nikko Asset Management's chief global strategist John Vail placed the Huawei stoush in the context of the wider push by the US to force reform of China's trade and intellectual property practices.

Imposing tariffs on Chinese was one source of that pressure.

"Nor will the US end efforts to prevent allies from using Chinese 5G telecom equipment due to security concerns, and it will continue making life extremely difficult for other Chinese national champions ... until China eliminates state subsidies and government ownership of such companies under the WTO reform banner," said Vail. "Eventually, China will be a major player in all hi-tech fields, it is just a question of how long it takes and how disruptive and risky a process it chooses to pursue."

Bowater said no evidence of wrongdoing by Huawei has been presented and the company "strongly reject the notion that our business threatens New Zealand in any way".

"We deserve the opportunity to have our voice heard and to address any concerns in good faith."

The company has operated in New Zealand since 2005 and the impact of its inability to do so in the 5G roll-out would have impacts for consumers "both in terms of technology and price due to the lack of competition".

"Huawei has a proven record of delivering the best technology in New Zealand at a competitive price. In March this year we achieved a then world-record of 18.23Gbps for the indoor 5G trial with Spark while our competitors were only able to achieve just over 1Gbps the same week.”

(BusinessDesk)

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