Spark and Huawei show cautious optimism as UK allows Huawei

By Pattrick Smellie

April 25 (BusinessDesk) - Spark New Zealand and Chinese telecommunications equipment maker Huawei's local arm are both expressing cautious optimism that a UK government decision to allow Huawei gear into parts of the British 5G internet build could see the same approach taken in New Zealand.

Huawei's New Zealand deputy managing director, Andrew Bowater, was the most explicitly optimistic following the announcement on the eve of a trade mission to Beijing by UK chancellor for the exchequer, Philip Hammond, that Huawei could supply elements of the next generation of the internet, so-called '5G', as long as they were not core elements of the system.

"This is exactly the type of solution we have been looking at for New Zealand," Bowater said in an emailed comment to BusinessDesk. "The core is the sensitive part of the network and we recognise that and are happy to not sell that service here and limit ourselves in that regard, as we did with 4G for Spark as well."

The same approach was taken in New Zealand with the rollout of the existing 4G network, where sensitivity about having a Chinese firm supplying infrastructure at the heart of the country's telecommunications network prevented Huawei's involvement in core elements.

The United States has been leading a lobbying charge against allowing Huawei into 5G networks in the developed world, in particular in the countries that belong to the 'Five Eyes' global telecommunications intelligence-gathering system: the US, UK, Canada, Australia, and New Zealand. Australia has been the most outspoken backer of the US approach and New Zealand's Government Communications Security Bureau last year rejected an application from Spark to include Huawei in non-core elements of the 5G build.

The issue has become a focus for tension in relations between China and New Zealand, with Prime Minister Jacinda Ardern telling the Chinese leadership during a state visit to Beijing earlier this month that the decision was not political and that Spark and 2Degrees, which both use Huawei equipment in their 4G networks, were free to reapply to the GCSB with plans to mitigate the risks the agency had identified.

However, Spark has not so far reapplied, in part because the sensitivities that led to the official rejection are understood to have focused on geo-political rather than identified technical risks, making technical fixes all but impossible to pinpoint.

Spark's corporate relations lead, Andrew Pirie, told BusinessDesk late yesterday: "We have read the reports out of the UK today with interest. These reports suggest the UK is following other European jurisdictions in taking a considered and balanced approach to managing supplier-related security risks in 5G infrastructure.

"Our discussions with the GCSB are ongoing and we expect that today’s developments will be a further item of discussion between us," he said.

Huawei insists it does not undertake espionage for the Chinese government and a special UK office established to identify any risks specific to Huawei equipment reported earlier this month that it had found no evidence of 'backdoors' that could allow such exploitation to occur. It did, however, criticise aspects of Huawei's software code as having security weaknesses.

Western governments fear that Huawei's Chinese ownership means it is inevitably subject to Chinese law requiring firms to cooperate with the government in information-gathering in the national interest - a requirement that could be triggered in the event of real or cyber-warfare.

US officials have reacted strongly to the UK decision. The Financial Times reports the US State Department ambassador for cyber and international communications, Robert Strayer, as saying that while "the edge was dumb" between core and non-core elements of the 4G network, there is "no relevant distinction between the core and the edge of the 5G network".

Rob Joyce, senior cyber security adviser to the US National Security Agency told the FT: "We are not going to give them (China) a loaded gun."

"What we will be insistent on is UK decisions can't put our information at risk, but the good news is that the UK already understands that."

(BusinessDesk)

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