Wednesday, 27 June 2018 14:16

Australia needs Huawei for 5G due to technology, costs: chairman Featured

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John Lord addressing the National Press Club in Canberra on Wednesday. John Lord addressing the National Press Club in Canberra on Wednesday. Sam Varghese

Chinese telecommunications giant Huawei Telecommunications should be allowed to play a role in Australia's 5G landscape as it would benefit both the general public — through cheaper communications — and businesses through better technology and the additional competition, the chairman of the company's Australian arm, John Lord, says.

Addressing the National Press Club in Canberra on Wednesday, Lord once again made a forceful defence of the company he heads, against the many charges it has had to face in the past year or two.

"Can Huawei be trusted to deliver 5G in Australia?" he asked, answering his question by pointing out that the company was the most audited, inspected, reviewed and critiqued global ICT player.

"We are proud that after every kind of inspection, audit, review, nothing sinister has been found. No wrongdoing, no criminal action or intent, no 'backdoor', no planted vulnerability and no 'magical killswitch'. In fact, in our three decades as a company no evidence of any sort has been provided to justify these concerns by anyone – ever."

And he made it clear that even if Australia decided to exclude Huawei from the 5G build, much of the 5G equipment that was used would still be Chinese-made.

"When Huawei was excluded from the NBN, Alcatel Lucent, now Nokia, became the sole supplier of the fibre technology product GPON. That product is manufactured barely a kilometre down the road from Huawei’s facility in Shanghai," he said. "The factory is called Shanghai Bell, a joint venture between Nokia and a Chinese state-owned enterprise.

"I highlight this not to be critical of Nokia, because Huawei obviously manufactures its products in China, but I do it to underline the reality of the world we live in. Our supply chains are global, our production lines are similar. Huawei or no Huawei much of the 5G equipment will continue to be made in China."

Lord said Huawei was the world’s number one telecom infrastructure provider, working with 45 of the top 50 international telecom operators, including Vodafone and BT in the UK, Telus in Canada, Spark in New Zealand, and Telefonica and Deutsche Telecom across Europe.

At the beginning of his speech, he said he would deal with the "challenges of cyber security and how we can deliver 5G in a safe and secure way". But, he added, "let’s be clear this is not just about Huawei and 5G. As part of the debate there needs to be an open discussion in Australia and understanding about the emergence of 'Smart China' and 'Smart Asia'.

"It is a discussion that will have huge implications for Australia as part of the rapidly evolving global landscape. It challenges set ways of thinking and upsets the old order. But one thing is clear, Smart China & Smart Asia is here, it’s happening and with ⅔ of the world’s middle class coming from Asia by 2030, we can’t stop it and I would argue we can’t afford to ignore it."

He pointed out that it was no longer the case that Chinese companies made cheap copies of Western products. "No longer are Chinese companies merely cheap copycat producers. More and more they are leading in their field of business. A new global reality has emerged in the world of innovation and technology," Lord said.

"The US and Europe no longer are the only source of technical and business leadership. Companies from Asia, particularly China, are now driving the innovation agenda, alongside the giants of Silicon Valley."

China was spending US$200 billion on innovation annually, and by 2019 the OECD expected the country to be the world's biggest spender on research and development, he said.

Lord highlighted some myths that were prevalent about Chinese companies: that they get cheap credit from Chinese banks, that a communist party cell was running Huawei, that the company had to co-operate with the Chinese government in intelligence work, that the British Government regretted having Huawei working there, and that Huawei was asking the Australian Government to do something which the Chinese Government would not allow foreign companies to do in China.

He negated every one of them: firstly, he said, 80% of the financing that Huawei got was from non-Chinese global banks, with two of them being Australian banks; secondly, every company in China had a communist party branch but it had no role in running the company; Huawei Australia was not under any compulsion to follow Chinese law in Australia, only Australia law; the UK was happy to have Huawei there with the former Chancellor of the Exchequer, George Osbourne, once saying "There are some Western governments that blocked Huawei from making investments, not Britain, quite the opposite"; and both Nokia and Ericsson were undertaking 5G work in China, with the former having won a contract with China Mobile for 13 city metro and two provincial backbone networks as part of China Mobile's 5G build.

Lord asked why Australians should care about Huawei, "a company they most likely can’t pronounce the name of or let alone know what it does".

And he provided the answer: "Put simply we have made your broadband and telecom bills cheaper. We enable increased competition in the telecom market and we have brought affordable innovation to Australia which makes it better for individuals and businesses across the country.

"Today Huawei is the largest supplier of mobile broadband in Australia, we provide the equipment for Optus, Vodafone and TPG. We have also built Australia’s largest private 4G network across the Cooper Basin for Santos. With our partner UGL, we have built Australia’s largest mobile communications system for railways on the Sydney metro rail system."

Lord said the numerous suggestions floating around that Huawei should be banned from building 5G networks in Australia should be a matter of concern for everyone and every business in Australia.

"The implications about limiting access to technology competition will be devastatingly high – and is a short term small mind choice rather than seeking to incorporate all technologies in a solution that also secures our critical structures," he said.

"Our allies are finding ways to embrace the new world, the time is now for Australia to do the same. We respect the open debate. As long as that debate is based on facts and is fully informed. We respect the right of any government to consider national risk and security. Huawei is always open to discuss the best options to enable Australia to have access to the best technology that is safe and secure for its citizens."

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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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