ITP Techblog

It's a few years now since Huawei was blocked by our Government from building 5G mobile networks here.

That was particularly problematic for mobile network operator 2Degrees, which had been able to enter the mobile market and expand its 4G network thanks to a favourable vendor financing network deal with Huawei.

2Degrees eventually struck a deal with Sweden's Ericsson to build its 5G network and is also gradually replacing its ageing 3G/4G network with Ericsson equipment too. But the mobile player, which recently merged with broadband provider Vocus Group, would have had a real headache on its hands if it had been forced to rip out its existing Huawei equipment on an accelerated timeline.

That's what has just happened in Canada, where the Government has finally banned Huawei and fellow Chinese telecoms equipment maker ZTE from building 5G networks there. Existing 5G equipment from the two companies will also have to be removed by June 28, 2024 and any LTE (long term evolution) equipment will need to be removed from networks by the end of 2027. 

5G application rejected

While New Zealand technically didn't ban Huawei from building 5G networks here, the Government's rejection of its application to do so, based on advice from our intelligence agencies, effectively amounted to a ban. 

Canada has been mulling a ban on Huawei since 2018. In the meantime, Canadian telcos including Bell and Telus spent an estimated C$700 million on additional Huawei network equipment which will now need to be removed, with no compensation from the Canadian government for doing so.

While the antipathy towards Huawei and ZTE stems from concerns the telcos have built backdoors into networks they've installed, which could be used to intercept network traffic or disable the networks entirely, no proof of such backdoors has been made public by Five Eyes nations.

Still, the Canadians see a major risk of Huawei and ZTE being called on by the Chinese Government to do so in future.

"The Government of Canada has serious concerns about suppliers such as Huawei and ZTE who could be compelled to comply with extrajudicial directions from foreign governments in ways that would conflict with Canadian laws or would be detrimental to Canadian interests," François-Philippe Champagne, Canada's Minister of Innovation, Science and Industry, said in a statement.

While New Zealand's treatment of Huawei amounts to the least aggressive of the Five Eyes nations, the underlying politics are much more problematic for the other countries. President Trump blacklisted Huawei at the height of a trade war between the two countries.

Canada's position was complicated by the fact that in December 2018, it arrested Meng Wanzhou, Huawei's chief financial officer, in Vancouver. She was held under house arrest but released last year when the US, which was asking for her extradition to face charges of evading trade sanctions, agreed to defer the prosecution and allow her to leave Canada.

But Beijing had also arrested two Canadian nationals, accusing them of being engaged in espionage in China. The two men have since been allowed to return to Canada.

Huawei's smartphone business saw revenue dip 14% in the first three months of the year due to sanctions slapped on it by the US, which means Google's operating system can't be run on the phones with full capabilities. Huawei has been pivoting its IT and networking business away from western nations, bolstering its domestic business and expanding into semiconductor production and development of its own HarmonyOS operating system.