Wednesday, 19 December 2018 19:25

Australian 5G will cost billions more due to Huawei ban: claim Featured

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Ken Hu: "Security concerns can only be addressed through technical discussions. Security discussions need to involve all stakeholders." Ken Hu: "Security concerns can only be addressed through technical discussions. Security discussions need to involve all stakeholders." Courtesy YouTube

Australia's ban on the use of 5G equipment from Chinese telecommunications equipment vendor Huawei Technologies will result in the cost of deploying wireless base stations being higher by anything from 15% to 40%, Huawei chairman Ken Hu says.

Hu, who is the rotating chairman of the company at the moment, told a media event in Dongguan, where Huawei has opened a new campus, that his figures were taken from a study titled The Value of Competition on 5G Network Deployment carried out by a company known as Frontier Economics. Journalists from AP, The Wall Street Journal, the Financial Times, CNN, CNBC, Reuters, Fortune and Nikkei were among those present at the media event on Tuesday.

The cost of building an entire 5G network in Australia would be higher by several billion dollars, said Hu, adding that was what even worse was that the time for people to adopt and use 5G technology would be delayed.

In response to a question, Hu said that neither the US nor Australia had given any specific reasons for the ban that both countries have imposed on Huawei equipment.

However, countries like the UK, Canada, Germany and France had engaged with the company to sort out any potential issues.

The US has banned the use of Huawei equipment in its 5G networks, claiming that the company can be a conduit for spying by Beijing. Australia and New Zealand have both followed the US lead and banned the company from roles in their respective 5G rollouts.

Last month there were reports that the US was stepping up the pressure on its allies to give the cold shoulder to the Chinese firm which is the world's biggest supplier of telecommunications equipment.

ken hu media roundtable

Ken Hu answering questions from the world'd media in Dongguan on Tuesday. Photo: courtesy Huawei

"It’s a pity that we haven’t got any clear message from the Australian Government, saying what exactly the problem is, and what is the evidence for them to come to their conclusion," Hu said. "And we did not have the opportunity to clarify this doubt with the Australian Government.

"Our opinion [on labelling Huawei as a security risk] is that any conclusion, any speculation should be based on real evidence. Either you have evidence to show that Huawei’s solution or Huawei’s equipment is not secure.

"Over the past 30 years, hundreds of telecom operators have used Huawei’s equipment. There have been no major cyber security incidents. And there has been almost zero Huawei equipment being used in the United States, so what is the evidence here to say that Huawei is not secure?"

The head of German IT watchdog Arne Schoenbohm echoed a similar line to Der Spiegel on Monday, saying: "For such serious decisions like a ban, you need proof."

Hu also pointed out that while there were allegations made — in the US — that Huawei's behaviour was a problem, over the past 30 years the company had grown to become a US$100-billion firm with business in 170 countries.

"So the question I want to ask is, for a company with US$100 billion in revenue, with businesses in 170 countries, with the fact that we’ve provided leading products to most telecom operators around the world, we serve hundreds of Fortune 500 companies, we also serve hundreds of millions of consumers around the world – you say Huawei is a cyber security risk without any proof. On what grounds?"

Hu said Huawei had secured 25 contracts for rolling out 5G networks and was in the process of shipping more than 10,000 base stations.

The company has undertaken a five-year program to upgrade its cyber security at a cost of about US$2 billion, he said. The integrated product development program included improvements in software engineering.

Hu said the Oversight Board in the UK had pointed out that the company needed to improve its software engineering capabilities and practices.

"This is help from the UK Government and we feel very appreciative about it. Therefore, as part of the overall IPD 2.0 transformation, we included software engineering capabilities as a very important component. In terms of how we arrived at this number [US$2 billion], it is based on our technology mix and also based on our own cost estimations," he said.

Asked about the arrest of the company's chief financial officer, Meng Wanzhou in Vancouver on 1 December, Hu said: "Currently, our business operations are not impacted by the case in Canada. Our business operations as a company and operations in the financial system are still business as usual."

He offered no comment when asked about two Canadians who have been arrested in China after Wanzhou was taken into custody, reportedly on grounds of espionage.

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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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