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Previously blacklisted telecom Huawei and fellow Chinese vendor ZTE are two of five companies bidding for Telstra’s core 5G network, Crikey has learned.

These include Finland’s Nokia, Sweden’s Ericsson and Korea’s Samsung. Ericsson won the test-of-concept network rolled out for the Gold Coast Commonwealth Games. Since then, Telstra has been testing the other companies out of the same exchange.

Andy Penn stated clearly two weeks ago that fast tracking 5G, so it beats Optus to market, is key priority for his Telstra revamp.

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But the amendments to telecommunications sector security reforms coming into effect in September allow the government “to provide risk advice to mobile network operators or the relevant minister to issue a direction”. The government will be able to effectively remove any company that could pose a security risk from a telecoms network tender. The competitive 5G fixed wireless spectrum auction, is expected to commence in October.

Huawei was originally banned, by Labor Communications Minister Stephen Conroy, from supplying technology used in the creation of the NBN. This was a result, vendor sources strongly suspected, of acting on ASIO advice echoing intelligence given to the US government. The question, then, is why it is only the US and Australia that have ever banned Huawei from networks?

There are long standing rumours — with no evidence on either side — that the People’s Liberation Army owns shares in Huawei, or even outright controls it, stemming from the fact that company founder Ren Zhengfei is an ex-PLA officer. 

Sure, if the Chinese government wanted some feature or weakness installed in a network by one its companies, they would play ball. As long as that company didn’t want to go broke. But this is not unique to China. Huawei’s late competitor, Lucent Technologies, used to do such jobs for the US military (and many still probably do). NEC/Fujistu do so for Japan, Alcatel for the French, and so on and so forth. Cyber warfare is game on. It is cyber security technology, not telecommunication network vendors, where the focus should be.

There is also an unsolvable problem in declaring Huawei a security risk and banning them from providing 5G, because the radio access network (RAN) that enables close to half the current mobile networks in Australia is operated by Huawei.

The RAN is a core part of each network; it won’t, and can’t, change for 5G. Once 5G gets to widespread mobile use, existing RANs will be doing most of the heavy lifting, with the help of new software to speed things up. To ban the company providing one of the largest RANs, the message is apparently that security on fixed wireless is more important than Australia’s 20 million or so mobile users. Unless, of course, Malcolm Turnbull, wants to pay Vodafone and Optus to replace their networks.

ZTE’s breaching of Iran and North Korean sanctions may see it banned for reasons other than national security, so there’s an easy win here for Turnbull in his fractious relationship with Beijing: let Huawei at least stay in the race.

Either way, the company has already banked a win with all the free publicity the story has so far generated. The old wisdom that there’s no such thing as bad publicity is amplified here by the political debate surrounding the issue — Huawei’s brand recognition must be going through the roof. Huawei has already won the network wars and is settled nicely at the top of the international market. Its new push now is to significantly improve its handset market share; it already has about about an 8% share in Australia and it just got a serious leg up.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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