Foreign Affairs

GCSB decision isn’t end of road for Huawei

The GCSB has declined Spark’s request to use Huawei technology in rolling out its 5G network, citing “significant national security risks”. 

But it’s not the end of the road for Huawei, which could still play a part in Spark’s network should the company choose to work with the GCSB to mitigate its concerns. 

Spark had wanted to use Huawei technology in its 5G network, but New Zealand security legislation means all new telecommunications networks must be vetted by the GCSB first for security concerns. 

Huawei has been cited by foreign governments as a security threat, given its perceived closeness to the Chinese government. Australia has blocked the firm from rolling out new networks, the United States has an effective ban and senators there have lobbied Canada to do the same.

The concerns are elevated for 5G networks because of peculiarities in 5G technology. In previous networks, most computing is done in what is known as the “core”, which is the heart of the system. Huawei has stayed away from providing core services to New Zealand networks, sticking to technology on the “periphery”. 

But speeds demanded by 5G mean that more computing is done on the edges of the network, meaning Huawei technology would be used on parts of the network that could represent a national security risk if hacked.

GCSB director-general Andrew Hampton said today that “a significant network security risk was identified”. Under the law, it notified Spark of these risks, meaning it cannot proceed to build the network as it stands.

Hampton did not comment further citing an ongoing regulatory process. A statement from Spark said the company had not been able to review the reasoning behind the decision or to consider what further steps it will take, should it choose to. Huawei has repeatedly denied that it represents a security risk. 

The ultimate decision could be a long time away

Today’s decision isn’t the end of the road for Huawei’s involvement in the 5G rollout. Under the Telecommunications (Interception Capability and Security) Act or TICSA, Spark has the opportunity to mitigate concerns raised by the GCSB to eventually get the organisation’s approval to build a network.

But with the GCBS’s report on the Huawei strictly confidential, it is difficult to know whether the concerns raised could in fact be mitigated. 

GSCB Minister Andrew Little told Newsroom that the process was "ongoing".

“This morning the director-general of the GCSB notified Spark of his assessment of the technology they wish to introduce, the next part of the process is that Spark and GCSB work together to see if they can mitigate the national security risk presented by the technology to the point where they can eliminate that risk," Little said. 

Little said he was being briefed on the security issues raised. 

Spark said it was confident the decision would not affect plans to launch its 5G network by 1 July 2020, although whether this network still involves Huawei is another matter.

Yesterday, Opposition leader Simon Bridges said he was yet to see a “smoking gun” that suggested New Zealand should be concerned about Huawei. 

Bridges said that banning Huawei could have implications for quality and pricing in New Zealand’s mobile sphere.

“Huawei is at the top of the game in terms of telecommunications infrastructure and equipment and if they are not part of a tendering process for some of these things in New Zealand there will be quality and there will be pricing issues that go with that,” he said.

The TICSA process could ultimately end with Little being required to make a decision on whether to approve the network, but Little said the process was "nowhere near that point at this stage".

Huawei’s competitive prices have also been cited by Spark and 2Degrees as reasons for the firm’s popularity with New Zealand telcos.

2Degrees chief of corporate affairs Mathew Bolland said that it was seeking clarity from the GCSB on how the decision would affect its own planned 5G network.

“Our comments on the importance of multiple vendors to deliver price competitiveness still stand, so if this announcement has a similar impact on 2degrees it will be a real disappointment for competition,” he said.  

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