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GCSB says no to Huawei in Spark's 5G network

Paul Brislen, Editor. 28 November 2018, 5:29 pm

In a surprise decision, the Government Communications Security Bureau (GCSB) has turned down Spark's application to use Chinese equipment maker Huawei in its 5G mobile network deployment.

Spark, and fellow mobile operator 2Degrees, use Huawei equipment extensively throughout their existing 3G and 4G networks, and parts of the Ultra Fast Broadband fibre network are also built using Huawei equipment, so the decision (apparently based on security concerns) came out of the blue.

Spark has released a short statement saying it was informed of the decision by the Director General of the GCSB.

"The Director-General has informed Spark today that he considers Spark's proposal to use Huawei 5G equipment in Spark's planned 5G RAN would, if implemented, raise significant national security risks."

This raises questions about the use of Huawei equipment throughout existing networks and the potential security risk there, but also throws into doubt the future network builds for 5G deployments throughout New Zealand.

One industry insider told Techblog that while this won't necessarily slow down the deployment of 5G, it plays into the hands of the one remaining national network provider in New Zealand - Nokia.

"They're vastly more expensive than the Chinese and that's going to hurt. It puts them in a monopoly position and that gives them all the cards to play with," says the source who declined to be named.

The GCSB has not released any detail as to why they are concerned now about Huawei equipment. Under the Telecommunications Interception Capability and Security Act (TICSA), any changes or upgrades to networks must be signed off by the GCSB. Since the introduction of the Act in 2013 the agency has processed hundreds of applications - this is seemingly the first to be denied. (UPDATE: There has been at least one earlier instance of GCSB denying a network operator authorisation for an upgrade, but most of the detail is redacted)

This isn't the end of the process, however. Spark and the GCSB will now work on a risk-mitigation plan which will then be submitted to the GCSB for approval. If that is again rejected, the Director can ask to refer the matter to the Minister in charge of the GCSB, currently Andrew Little. At that point the decision is independently reviewed by the Commissioner of Security Warrants who can send it back for more work or refer it to the Minister. Ultimately the Minister will make the decision potentially taking into account consequences with regard to the impact on "competition and innovation in the telecommunication markets" in New Zealand.

The decision only relates to Spark's application around 5G deployment and does not directly affect any other request pending or yet to be received. It also doesn't affect existing network deployments.

Another industry participant, also speaking anonymously, says the industry is upset that the only notification they received about the decision was in the form of Spark's press release. The rest of the industry is still in the dark about what this means in the longer term.

The government, and GCSB, have been under increasing pressure to ban the Chinese equipment maker from its fellow Five Eyes partners, in particular Australia and the US, both of which have refused to allow Huawei equipment in their own tier one telcos. Whether the politics of the matter had any part to play remains to be seen but the debate is likely to continue for some time.


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