'Not a world leader': Huawei boss slams National Broadband Network
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'Not a world leader': Huawei boss slams National Broadband Network

Huawei chairman John Lord has pointed to the National Broadband Network as an example of what happens when Canberra imposes bans on Chinese companies, saying the $49 billion government-owned network is "not a world leader".

In the aftermath of a decision to ban companies like Huawei and ZTE from participating in building the nation’s 5G networks, Mr Lord has argued the choice will have ramifications for the cost and efficiency of upcoming mobile network builds.

Huawei chairman John Lord said telling the company to sit-out of upcoming network builds would result in the same situation as in 2011.

Huawei chairman John Lord said telling the company to sit-out of upcoming network builds would result in the same situation as in 2011.Credit:Alex Ellinghausen

"I was called in by government in 2011 to be told we could not participate in the NBN," Mr Lord told Fairfax Media, claiming Huawei’s proposal cost 25 per cent less than competing equipment providers at the time.

"With all due respect to those who got the NBN working and got it done well, it’s not a world leader, it would have been a lot better with three top companies competing in price and technology," he said.

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One of the issues outlined by the government, which has security concerns about Chinese technology vendors, was a blurring between the core, or ‘brain’, of the network and the edge, like handsets, in the upcoming ultra-fast mobile networks. Mr Lord said there was less risk of blurring under 5G than 4G, which Huawei was involved in for several major Australian telecommunications companies, such as Optus, Vodafone and TPG.

"I think it is a China thing. China and Australia are not exactly friendly at the moment," Mr Lord said.

"Huawei is staying in Australia but we’ll have to reshape the business," he said. Current network builds make up 60 to 70 per cent of the business, and he said he had expected up to 50 per cent of the business was going to be driven by 5G.

Mr Lord said it was "very hard to shoot down false allegations", saying mitigation techniques worked overseas, in the form of a test facility run by the government in the UK, and third-party checks in Canada.

Telcos privately admit to being "surprised" by the decision, despite rumours of a potential ban circling for months. One said it was a shock Australia was "voluntarily submitting itself to a duopoly of mobile network vendors".

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China's National Intelligence Law came into effect in June 2017 and there is unlikely to be any media coverage of its application, or court tests, because of the sensitivity of the work of Chinese state security services.

The law states in article seven that "all organisations and citizens shall support, assist, and cooperate with national intelligence efforts in accordance with the law".

Article eight says national intelligence work should "preserve the lawful rights and interests of individuals and organisations".

The government’s release said the "involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference".

Mr Lord said legal practitioners he had sought advice from said the laws "don’t affect Huawei in Australia. Huawei Australia only abides by Australian law".

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Chinese state media reported on Wednesday that China will finish 5G testing by the end of the year and was expected to commercially launch it in 2019.

"By the end of August, telecommunications enterprises will have finished tests for both indoor and outdoor non-standalone 5G networks," said Wang Zhiqin, vice president of the China Academy of Information and Communications Technology.

She said 5G chips are expected to be rolled out in the first half of 2019. Smart terminals are expected to be ready for commercial launch before smartphones.

A Deloitte report this year said China Mobile's trial of 5G involved five cities and 500 base stations, and China had already spent $US24 billion on 5G infrastructure.

Jennifer Duke writes about media and telecommunications.

Kirsty Needham is China Correspondent for The Sydney Morning Herald and The Age

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