Market News

Huawei Wins Major Australian Contract but Government is Likely to Block Any 5G Network Bids

Chinese telecoms giant Huawei, has secured a $136 million contract to provide voice and data services for the Public Transport Authority of Western Australia.The project, which is a joint venture between Huawei and UGL, includes building and maintaining a digital radio system for Perth’s 180km rail network.Beginning this month and slated for completion in 2021, the ‘Radio Systems Replacement’ project is expected to employ more than 50 staff.The service will operate over a 3GPP LTE network using the Authority’s existing 1800 MHz spectrum. After designing and deploying the system, the partners will maintain the network for five years, with an option to extend to ten years.“We have been providing similar communications technology services to Sydney Trains and Ambulance NSW safely and securely for nearly a decade,” said John Lord, Huawei Australia Chairman.The news comes as Australia’s intelligence community continues to express concern about the danger of Chinese telcos engaging in covert data gathering on behalf of the Chinese government.As a Chinese company with close ties to the Communist Party, and founded by People’s Liberation Army member Ren Zhengfei, sceptics believe Huawei is obliged to acquiesce to Chinese government demands (something the company has repeatedly denied).This has resulted in national security concerns, with senior officials hinting that Huawei is set to be excluded from providing equipment to support Australia’s impending 5G wireless network.If the ban goes ahead, this won’t be the first time Huawei has been kicked out of contention.In 2008, Australian intelligence agencies eliminated Huawei from the running as a primary vendor for the National Broadband Network, and just last month Australia intervened to prevent Huawei signing a deal with the Solomon Islands to deploy a subsea internet cable between Australia, Papua New Guinea and the Solomon Islands. Instead, Prime Minister Malcolm Turnbull and Solomon Islands leader Rick Houenipwela initiated discussions around using Australian aid money to fund the $200 million project.It’s a bold move considering more than half of Australians currently use Huawei telecommunication products on a daily basis (according to Huawei) and the company is also a member of the Australian Government’s 5G working group. However, Australia is not alone in vocalizing its concerns about Huawei’s threat to national security.In 2013, former CIA leader Michael Hayden said Huawei represents an unambiguous threat to Australia and the USA. And earlier this year, the USA introduced a bill banning the use of Huawei devices by government employees, while policymakers urged the nation’s telcos to cut ties with their Chinese counterparts. The company also faces criminal investigation in the USA amid allegations of violating sanctions in relation to Iran.And whilst the UK government has for many years assured the public that Huawei posed no risk to Britain’s national security, it seems this opinion has changed.Last week, the government’s official body that has been monitoring Huawei’s UK products since 2010 released a report stating it could only provide “limited assurance” that all risks to national security from Huawei’s involvement in the UK telecommunications network had been “sufficiently mitigated”.The report specifically stated that “Technical issues have been identified in Huawei's engineering processes, leading to new risks in the UK telecommunications networks.”This is a big blow for the operator and undermines the claims of Huawei’s John Lord, who defended the firm recently in a public speech in Australia.“Government officials have raised no real concerns other than to seek more information from us about the way 5G is being formed, its similarities to 4G and how Huawei intends to take 5G forward,” said John Lord, who rejected the idea that Huawei might act against Australia’s national interest.Mr. Lord used his address at the National Press Club in Canberra last month to dispel what he referred to as a series of ‘myths’ about the Chinese company. He denied claims that Huawei gets cheap loans from Chinese banks, and he denied that Huawei is controlled by the Communist Party or intelligence agencies.“Our customers in Australia are among some of the most innovative in the world and Huawei wants to continue partnering with them. We have worked hard to become a global leader in technologies such as 5G, cloud and IoT, vital for Australian business and industry over the next few years,” said John Lord.Prime Minister Malcolm Turnbull is expected to make a decision shortly on whether or not Huawei should be excluded from providing equipment for the forthcoming national 5G wireless network.Despite the negative publicity of late, Huawei launched a new Customer Solution Integration and Innovation Experience Centre (CSIC) in Sydney last month, underscoring the company’s commitment to Australia’s digital transformation.The facility provides resources for the design and testing of ICT solutions such as Big Data and IOT, and includes a data center with high-powered networking and computing capabilities.

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