Huawei and ZTE Banned from Australian 5G Deployments
Continuing a trend in the English speaking world, Huawei and ZTE have been banned from providing wireless network technology for Australia’s 5G rollouts. In a tweet, Huawei said it has been informed of the ban by the Australian government. The Trump administration. recently banned U.S. government agencies or contractors from using most equipment provided by Huawei and ZTE and also banned the sale of mobile phones from those Chinese companies.
“This is an extremely disappointing result for consumers. Huawei is a world leader in 5G. Has safely and securely delivered wireless technology in Australia for close to 15 years,” Huawei wrote in its tweet.
The confirmation of the ban came after Australian minister for communications Mitch Fifield and treasurer and acting minister for home affairs Scott Morrison revealed in a joint statement that the government has provided “5G security guidance to Australian carriers.” The Australian ministers have invoked the Telecommunications Sector Security Reforms (TSSR) obligations that among other things empower the government to compel operators to protect their networks against threats to national security.
While their statement did not mention any vendors by name, the ministers said that “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 unauthorized access or interference.”
To justify banning Huawei and ZTE from their involvement in 5G rollouts despite their prominent roles in the deployments of 3G and 4G networks, the ministers said that 5G will require a network architecture that is significantly different from previous mobile generations.
“Where previous mobile networks featured clear functional divisions between the core and the edge, 5G is designed so that sensitive functions currently performed in the physically and logically separated core will gradually move closer to the edge of the network,” they said.
“This new architecture provides a way to circumvent traditional security controls by exploiting equipment in the edge of the network – exploitation which may affect overall network integrity and availability, as well as the confidentiality of customer data… Government has found no combination of technical security controls that sufficiently mitigate the risks.”
The Australian government has been rumored for some time to be considering banning Huawei 5G rollouts. However, due in part to the absence of evidence of any national security threat, some experts believe the ban is more motivated by politics than national security.
Huawei was also previously banned from providing equipment for the rollout of Australia’s National Broadband Network (NBN). Meanwhile, the U.S. has warned Canada about purchasing network equipment from Huawei and ZTE.
6 thoughts on “Huawei and ZTE Banned from Australian 5G Deployments”
Australia banned Chinese telecom firms Huawei Technologies Co. and ZTE Corp. from its next-generation 5G mobile network, aligning it with U.S. policy on the matter and underscoring concerns about the possibility of cyberspying by Beijing.
The Australian government said Thursday that companies that are “likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law” wouldn’t be able to guarantee security of the network. The statement didn’t specifically mention Chinese companies, but Huawei said it had been informed that both it and ZTE had been banned from the rollout.
“This is a extremely disappointing result for consumers,” Huawei Australia said on its verified Twitter account. “Huawei is a world leader in 5G. Has safely & securely delivered wireless technology in Aust for close to 15 years.”
A spokesman for Huawei, the world’s biggest supplier of telecoms equipment, didn’t immediately respond to a request for further comment. A ZTE spokeswoman declined to comment.
Australia’s intelligence agencies have been pushing for Huawei to be blocked from the network, though recently there had been speculation that a compromise might be reached. American officials had raised concerns about the matter to Australia’s leadership earlier in the year, The Wall Street Journal previously reported.
Canberra’s decision is a setback for Huawei’s global ambitions in the race to develop next-generation 5G technology. Being a leader in 5G technology is a priority for Huawei because telecom carriers are expected to be buying 5G software and equipment for years as it is rolled out world-wide.
The company has been aggressively pushing to set standards for 5G technology and has poured huge sums into 5G research and development, budgeting $800 million for 5G R&D this year on top of $1 billion already spent. So-called fifth-generation networks are expected to bring faster internet speeds, as well as provide the connectivity behind driverless cars, virtual reality and other cutting-edge technologies.
Canberra’s ban marks the most concerted effort by an American ally to block Huawei from participating in next-generation 5G networks. Huawei and ZTE will be “very concerned whether Australia is setting an example” that other countries could follow, said Wei Li, a lecturer at University of Sydney Business School.
Other American allies have heightened their scrutiny of Huawei. Last month, the U.K. government said a review of Huawei’s engineering found “shortcomings” in the company’s engineering processes. Huawei said it was working to address the concerns.
In its statement, the Australian government said that 5G differs from current networks, which include two parts. In existing networks, a “core” is where the most sensitive functions—for example, voice and data routing—occur, while the “edge” connects customer equipment such as phones and laptops to the core.
But in a 5G network, “the distinction between the core and the edge will disappear over time,” the government said. “This shift introduces new challenges for carriers trying to maintain their customers’ security, as sensitive functions move outside of the highly protected core environment.”
The matter is the latest turbulence for Australia’s relationship with China, which is an important trading partner. Australia recently approved new counterespionage safeguards that China believed were directed against it, and Australian officials blocked Huawei from building an undersea cable to the Solomon Islands. In a routine press briefing Thursday, a Chinese Foreign Ministry spokesperson said China was “gravely concerned” about the Australian decision.
“Instead of exploiting all kinds of excuses to create hurdles and taking discriminatory measures,” he said, “we urge the Australian side to abandon ideological biases and create a sound environment for the fair competition of Chinese enterprises in Australia.”
Huawei has operated for years in Australia, where it generated more than $600 million in revenue in 2017 selling smartphones to consumers and equipment to carriers including Optus, a subsidiary of Singapore Telecommunications Ltd. But Huawei has been virtually absent in the U.S. since a 2012 Congressional report said its gear could be used to spy on Americans. Huawei has long denied the charges, saying it is owned by its employees and operates without interference from Beijing.
Washington has stepped up its campaign against Huawei and ZTE in the past year, passing legislation banning government use of its products and pulling their phones from U.S. military bases. The U.S. has also targeted Huawei equipment in use in rural communities in the U.S.
Despite U.S. pressure, Shenzhen-based Huawei has emerged as the world’s biggest maker of telecom gear including base stations, switches and routers, competing chiefly with Sweden’s Ericsson AB and Finland’s Nokia Corp. Huawei was also the world’s No. 2 vendor of smartphones in the quarter ending June 30, ahead of Apple Inc. and behind Samsung Electronics Co.
ZTE, Huawei’s chief Chinese rival, has faced bigger challenges this year. It survived a brush with death this summer after U.S. authorities imposed a ban on buying U.S. parts because it violated a deal related to its evasion of U.S. sanctions on sales to Iran and North Korea. The Trump administration eventually reversed the ban after ZTE agreed to pay additional fines and fire senior leadership.
Australian 5G ban on Huawei, ZTE could have consequences
The decision by the Australian government to ban Huawei and ZTE from participating in the nation’s 5G rollouts over national security concerns contributes to the risk of a protectionist battle in 5G infrastructure, analyst firm CCS Insight has warned.
In a research note, CCS Insight said that the ban came shortly after the recent order from the Trump administration in the US banning US government agencies and contractors from using most components supplied by Chinese vendors including Huawei and ZTE.
In addition, the independent body Huawei established in the UK to monitor the integrity of their equipment and assuage concerns that networks using Huawei’s equipment could be used to facilitate spying by the Chinese government recently downgraded its assessment.
A report from the body found that “shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management.”
“Despite these setbacks, Chinese companies have become very important to the global telecom market. Huawei has challenged Ericsson and Nokia to become the largest maker of infrastructure equipment,” CCS Insight said.
“Although opposition in Australia, the US and potentially other countries will slow their ascent in the telecom world, Chinese companies are still investing heavily in 5G research and development and standardization efforts.”
With China expected to become the largest 5G market by connections as early as 2020, Huawei and ZTE will have considerable advantage in the race to 5G dominance despite the Australia ban, the research firm said.
“However, the immediate concern is that this development could escalate, with China adopting its own protectionist stance on 5G infrastructure at the cost of international suppliers such as Ericsson and Nokia.”
SK Telecom becomes the latest operator to snub Huawei
South Korea’s largest operator, SK Telecom, has become the latest to snub Huawei when it comes to choice of 5G equipment supplier.
SK Telecom has announced it will be accepting bids from Huawei’s rivals – Samsung, Ericsson, and Nokia – to supply equipment for its 5G network.
Many industry experts speculated Huawei would be named among SK Telecom’s preferred bidders, although the vendor has been caught up in controversy much like its troubles in the US and Australia.
The US has banned the use of Huawei’s equipment in national telecoms infrastructure for some years over security fears. Tensions were stepped up after US lawmakers were said to have been warning operators they would be ineligible for government deals and subsidies if they had contracts with Chinese equipment manufacturers.
Huawei Technologies, the world’s largest telecom equipment vendor that has faced recent business setbacks on security concerns, believes a unified security standard for the next generation of mobile technology – 5G – that all global participants must comply with would help to resolve politicization of the technology’s roll-out.
All countries need to recognise the importance of setting better common standards, adopting industry best practice and implementing risk-mitigation procedures to ensure that there is an objective basis for choosing technology vendors, said Andy Purdy, chief security officer of Huawei USA, in a video interview from this week’s Singapore International Cyber event.
Taking politics out of the decision-making process is vital “so there’s an open, objective, and transparent basis for trust, so that the users can trust it, the government can trust it, and the vendors can know what the requirements are,” he said.
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. However, Huawei and ZTE Corp, Chinese telecommunications equipment providers that have both invested heavily in research and development of next-generation networks, were both excluded from building Australia’s 5G infrastructure after Canberra laid out new rules in August, citing national security concerns.
China expressed “serious concern” about the Australian government’s action, according to a statement from Chinese foreign ministry spokesman Lu Kang. Meanwhile, amid an 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.
Unified objective security standards that are applicable to all markets and spread around the world could be “a very good thing,” said Purdy, who served as the director of the National Cyber Security Division of the US Government’s Department of Homeland Security between 2004 and 2006.
Following Canberra’s new guidelines, which bar the involvement of vendors “who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law”, Huawei said in a subsequent statement that the decision was made on “political grounds that undermine fair trade and hurt the interests of local consumers”.
Purdy said it’s important to sort out how to assess and address risk in relation to 5G in order to ensure that all vendors can meet objective functional, quality and security requirements.
“The more clarity we get, the more likely we’ll be able to say at some point that – these things are necessary and that we can do them, and that we can show that we can do them,” said Purdy, adding that all vendors need to be able to demonstrate they can meet the requirements objectively.
Frank Mademann, a Huawei employee who is also the Elected Chairman of Architecture Workgroup at 3GPP – the organisation that sets standards for the world’s telecommunications industry, said in the joint video interview that unlike the different types of standards adopted for past mobile networks – two for the 4G networks – 5G could be the first time the entire world has a single standard and a unified understanding from global participants about security needs.
“5G standards are designed (and will continue to be optimised) to make 5G safer than 4G,” said Mademann, who added that the next generation network offers more protections around subscriber identity, safeguards the interconnections between different carrier networks and will become even more difficult to crack as it adopts better encryption methods.
OPINION: Australia should reverse its Huawei 5G ban:
Huawei Is a Paralyzing Dilemma for the West–Western democracies are struggling to balance the geopolitical challenge of China with their need for 5G technology. A common approach is essential.
Huawei, based in Shenzhen, is not owned by the state — being Chinese, it’s somewhere between collectively and privately owned. It was founded by Ren Zhengfei, who once worked as a researcher for the People’s Liberation Army. But he and his firm insist that Huawei never has built, nor ever would build, so-called “backdoors” into its equipment that would let it spy on, or sabotage, its customers’ networks.
There are arguments for giving Huawei the benefit of the doubt. First, it tends to be cheaper than its rivals, which include the European companies Ericsson and Nokia Oyj. Second, it seems to be quicker. Earlier this year, Deutsche Telekom AG, a German cellphone operator, claimed that rolling out 5G without Huawei would delay its network by at least two years and add billions in cost.
Then there’s the risk that excluding Huawei could antagonize China on trade and investment. In Germany, the bureaucracies opposed to Huawei are the spy agencies and the interior ministry, both tasked with security, whereas the economics ministry and the chancellery, both concerned with the overall Sino-German relationship, are more accommodating.
Finally, there are the principles of fairness and economic openness. There’s no evidence that Huawei has spied on its customers. And part of what makes the West “western,” or at least liberal, is that it doesn’t close its markets to others without good reasons.
Huawei’s critics, of course, have plenty of reasons for its exclusion. First, it’s implausible that any Chinese company can avoid becoming an arm of the state and the Communist Party. China’s National Intelligence Law of 2017 requires all the country’s companies to “assist” in national intelligence, and to keep that assistance secret. An earlier law defines national security as including economics and culture.
Second, 5G isn’t any old phone network. Unlike 4G, it’s the infrastructure for machines and devices to talk to one another on the so-called Internet of Things. If it works well, it will make entire cities “smart” and enable autonomous cars to drive themselves through them, all the while exchanging reams of data. Think of the human body: If 4G is the ears, 5G is the entire nervous system. Would you want China to have control over it?
The fear is not overblown. Whoever provides the software and hardware for 5G will also have a head-start in eventually transferring that prowess into 6G and 7G. And once a technology is baked in, a simple software update could turn a harmless feature into a mole. A banal analogy would be your smartphone, when its maker schedules an update that adds emoticons but suddenly seems to drain the battery much faster — and all of this coincidentally just before the launch of a new model.
So caution is advisable. Even at the risk of slowing down the roll-out, regulators would be wise to assure diversity among suppliers. They should also ring-fence the most sensitive parts of the infrastructure. Procurement rules can’t discriminate against individual companies, but they should establish criteria of trustworthiness. Suppliers that can’t fully meet them would be allowed to play only in the network’s periphery.
Just as important, the western allies must coordinate their approach. It makes little sense for, say, Denmark to exclude Huawei while Germany next door includes it. Autonomous cars, trucks and boats, geo-tagged goods in containers, patients with heart monitors: All of these and other connected nodes on the network will be moving across the border, constantly communicating with different “clouds” of server computers in the background. The data have to be safe on both sides of the border.
The West and its allies must therefore come to a common position on Huawei — and ideally on both China and data security generally. 5G and its successors have an almost utopian potential to solve many human problems. They also have a dystopian potential to turn our freedoms into a surveillance hell. The democracies need to confront this reality.
Trump Extends Huawei Ban:
President Trump inked an extension to the US government’s ban on American companies’ business with China’s Huawei. The move essentially prevents US companies from doing business with Huawei through May 2021.
As Reuters reported, the action invokes the International Emergency Economic Powers Act, positioning China’s Huawei and ZTE as threats to national security. According to Reuters, the US Commerce Department is also preparing to extend the waivers it has provided to select US companies that will allow them to continue working with Huawei.
Hanging over the situation is the ongoing US-China trade war, a situation now further complicated by the COVID-19 pandemic that originated in China.
Trump’s action is noteworthy in light of a number of new developments, including reports that US companies may be given a green light to work with Huawei and other Chinese companies on 5G standards. And, separately, there are ongoing discussions about a government-funded program to pull Huawei equipment out of some US wireless operator networks and replace it with equipment from “trusted” suppliers.
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