Monday, 04 June 2018 11:57

Excluding Huawei from Australian 5G would be huge blow: chairman Featured

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John Lord: stout defence of company's operations. John Lord: stout defence of company's operations. Supplied

Huawei Australia chairman John Lord has launched a strong defence of the company and its operations, saying that if it were excluded from the 5G network build locally it would be of huge significance for the company.

Lord told Radio National's Breakfast program on Monday that at the moment most of Huawei's business in Australia was 4G.

"And we are providing more than 55% of Australia's 4G requirements across the whole nation," he told interviewer Hamish Macdonald.

Asked what the implications would be in terms of jobs and Huawei's commercial presence if it were denied a role in 5G, Lord refused to speculate.

"The future is all supposition and we certainly hope that is not the case, but as I said it's about 70% of our business, we have about 750 Australians employed," he said. "It's just huge and this is still the main part of our business in Australia: mobile broadband."

Macdonald asked whether a Western telecommunications company would be allowed to play the same role in China that Huawei was seeking to play in Australia.

Said Lord: "They are there. Some of our biggest competitors when we first started off in China were all Western companies. In fact, all the major cities in China were only supplied by Western companies until Huawei got (to a) sufficient size back in about 2000."

When Macdonald said there was a difference with 5G "because of the nature of this being critical infrastructure", Lord said "We would argue that there's a lot of critical infrastructure and as an ex-military person I'm well aware of those. No, we see 5G as the natural next step,a huge leap in technology from 4G."

He added: "We've gone through 2G, 3G 4G, and now into 5G which gives us all the advantages of getting rid of that latency So you get real automatic cars and lots of other benefits."

john lord huawei

John Lord: "...it's been reported across the media that Huawei could be a year or 18 months ahead of competitors (in 5G). And that's where we want to stay."

Macdonald again pressed on with a similar query, saying: "There will be physical things run off 5G like the IoT which makes this a far more critical question. Would a Western telco be allowed to play the role in China that you want to play here?"

To which Lord replied: "At the moment, we're running critical things off 4G, and in the same way 5G is going to allow us to do it far better to the benefit of all societies. Already we are running autonomous vehicles, already we are doing supervision of mines and Santos is a big project we have done. (And) Southeast Water, overseeing the water utilities in Melbourne. We're running those off 4G, they'll be done better off 5G. It is a mobile broadband technology."

When Macdonald again asked about Western companies, Lord responded: "They can get into the market, (but) there's no doubt that Huawei has a lead in this, and in fairness, in 5G, it's not just Huawei saying it, but it's been reported across the media that Huawei could be a year or 18 months ahead of competitors. And that's where we want to stay."

In Australia, nearly six years ago, Huawei was denied any role in supplying equipment to the country's national broadband network project, following advice by ASIS, one of Australia's spy agencies

Lord was asked about China's intelligence laws released in June last year, one article of which says: "All organisations and citizens shall in accordance with the law support, co-operate and collaborate with national intelligence work and guard the secrecy of national intelligence they are aware of. The state will protect individuals and organisations that support, co-operate and collaborate with national intelligence work."

After reading this out, Macdonald asked: "Can you see why that might be problematic for Australia?"

Lord said he had a different view: "I see that Chinese law is obeyed in China, in Australia we obey Australian law. in the UK, we obey UK laws.

"We're in Europe in a huge way and we obey their laws. Whichever country or region we're in, we obey the rules and laws of that country. And the US has the same type of rules in place, perhaps not exactly the same, Australia's about to introduce similar laws about persuasion or lobbying, and every country's got the right to do that within their own boundaries."

huawei honor

Asked whether the law did not extend to the company from China, Lord replied: "It's not a problem because when you say reach through that technology, we provide those vendors, Optus, Vodafone, TPG, maybe Telstra, with equipment.

"They operate the equipment. Now we may do maintenance, which is done by the more than 700 employees who are Australian, or we sub-contract it. We don't have Chinese nationals doing the maintenance on the equipment we provide to the major telcos, and they are the operators, not us."

Macdonald pressed Lord on software updates to equipment, saying these would originate in China. But Lord pointed out that he was wrong. "Well, no, (the updates come) from all different parts of the world. We actually run 14 R&D centres around the world of which only half are in China. We have them in Italy, the UK, Russia, our R&D centres are spread, we don't duplicate," he said.

Macdonald also pointed to article 12 of the same law which says that "National intelligence agencies may establish co-operative relationships with relevant individuals and organisations and entrust them to undertake relevant work."

And he added: "This is so clearly a problem."

But Lord said he did not see it as a problem "in Australia because Australian law says you can't do that. And Huawei obeys the law in every country that it operates. We are in more than 170 countries, providing 45 of the 50 big telcos with their equipment. If we do one thing wrong, our business is dead."

Asked what Huawei would follow in Australia if a Chinese law conflicted with an Australian law, Lord had a pointblank answer: "The Australian law."

When Macdonald expressed cynicism that the Australian public would believe this, Lord replied: "I certainly hope the Australian public does (believe us). Same as we would expect our major companies in other countries to obey those laws. And if they are uncomfortable with them, pull out."

Lord said Huawei had agreed to oversight by the UK spy agency GCHQ, "because that was the way to enter the market and be as open as possible. And that's what we are offering around the world. Canada does it in a slightly different way, it has a third party (doing the oversight).

"Spain's Telefonica uses a lab that we have in Huawei which is completely sealed and they take over. We are offering this to all countries around the world. We believe that all telcos should be open, and equipment should be checked. We build equipment on the supposition that nations or companies or rogues will try and crack your equipment. So the one that has the best cyber security is the best business."

Macdonald touched on the advice given to Prime Minister Malcolm Turnbull by the US when he visited that country, saying, "Reports say they warned him that Huawei's involvement in Australia's 5G network was one of the top two risks to Australian and US cyber security."

He asked how Turnbull could ignore that kind of advice coming from Australia's closest security ally.

Said Lord: "I haven't spoken to the PM since his return. I have had a lot of discussions over previous years with Malcolm Turnbull and he is quite knowledgeable on telecommunications. He (Turnbull) also spoke to (British Prime Minister Theresa) May and (Canada's Prime Minister Justin) Trudeau in London after that US meeting. So he may well have an opinion from their observations, saying they are doing trials with Huawei for 5G in Canada and the UK, (both of) which are part of the Five Eyes."

He said a decision on such things was up to Turnbull and his government, adding "There's a lot going on in the US at the moment, trade wars and deals and things. So there's many reasons why the US may give advice like that."

Huawei faced problems in the US in January, with a deal for AT&T to sell its phones on plans being cancelled at the last minute.

And following this, Verizon was reported to have yielded to pressure from the US Government to stop selling Huawei devices. In February, US intelligence chiefs warned against the use of Huawei equipment.

Asked about Huawei founder Ren Zhengfei, Lord pointed out that contrary to Macdonald's assertion that Ren was a telecommunications technician — and thus "something that people saw as a concern" — he was actually a construction engineer.

"Ren and I often have a joke about this, because of course I was in the military too, and he was a very junior officer, only a major," he said.

"Now Ren Zhengfei is a construction engineer, not a telecommunications engineer and to this day, Ren approves every building built in Huawei personally because that's his passion: architecture. As I said he's a construction engineer. Yes, he was in the military along with all young men of his age and then he was pensioned off from the military when they reduced its size."

Lord denied that Huawei had any ongoing contracts with the Chinese military. "No, we don't make any military equipment. We may sell them phones, I'm not sure, but I do hope they use Huawei mobiles. But we do not make any military equipment at all. What we make all round the world is equipment for commercial purchases."

He also said there were no joint R&D ventures with the military. "Not as far as I know and definitely the briefings I've had with my fellow global board members, no, we're not. We do commercial R&D in our own facilities," he said, adding that he had visited five or six of the company's R&D facilities.

Macdonald raised the issue of forthcoming legislation in Australia, both the Telecommunications Sector Security Reforms, which has been described as an anti-Huawei bill, and laws to stop lobbying, and asked if Lord saw the former legislation as an anti-Huawei law.

Lord said it was true that the TSSR had been described that way. "The answer would be no, we support that bill, we actually put a submission into the initial draft bill many years ago, we've worked with the communications bodies within Canberra who lobby for the industry and accept what that bill means and support it for the industry," he replied.

"Huawei, as a company, has no difficulty with any of these laws, we will obey all laws. Perhaps John Lord will look at the latest legislation on individuals because it would be sad if directors of companies cannot speak to politicians without being labelled as lobbyists. A director of a company will always want to put that company's views across."

Lord was also quizzed about using lobbyists in Australia and taking politicians to China to see Huawei's facilities. He said he did not know of any political lobbying firm that Huawei was employing now.

"We often employ individuals and we have, in the past, employed companies to help us with Canberra, but we are not lobbying any particular company at the moment except I, as the chairman and chief executive, visiting politicians and explaining where we are."

He said politicians, academics and journalists had all been taken to China to see Huawei's facilities, adding that he personally had taken about a dozen politicians in the last seven years.

Regarding expenses for these trips, he said the non-politicians had to get themselves to China, "and it is only the actual Huawei bits that we cover. Obviously, you come into our campus which is huge and we give you lunch".

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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