March 25, 2012 10:07 pm

Huawei set to miss out on Australia network

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The Australian government has stressed its determination to protect information security on a planned national broadband network in an indication that Huawei, the Chinese telecom infrastructure vendor, could be excluded from contracts for building it.

“The National Broadband Network is the largest nation-building project in Australian history, and it will become the backbone of Australia’s information infrastructure,” said the attorney-general’s office on Sunday.

“As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it.”

The statement followed a report by the Australian Financial Review that Tony Sheehan, deputy secretary of the Attorney-General’s Department, had told Huawei late last year “not to bother tendering” for NBN contracts because it would not succeed.

It comes as concerns in Australia over China’s rising military power are growing and the country is strengthening its alliance with the US.

The attorney-general’s office refused to comment on these details and said it routinely engaged with companies and would treat the contents of those discussions as confidential.

For Huawei, being excluded from the contracts would echo difficulties the company has faced in the US.

It has conquered many markets in the developing world and Europe and counts most of the world’s leading telecoms operators among its customers.

But because its founder and chief executive, Ren Zhengfei, was once an officer in the People’s Liberation Army and the privately owned company refuses to provide detailed information about its ultimate owner, US politicians have raised suspicions that the company might be an agent of the Chinese government or military and its equipment might pose national security risks to the US.

The network planned in Australia is to be used by multiple operators. Huawei is the only telecoms infrastructure equipment maker that has built similar networks that are in operation already, and has a strong record as it has supplied similar projects in eight other countries including the UK.

Huawei said it plans to bid to become the second supplier after Alcatel-Lucent for a gigabit-capable passive optical network within the NBN in Australia.

“We are of course disappointed that we have so far failed to win a contract, but even if we cannot participate in NBN at all, this will not stop us from expanding in Australia,” said Jeremy Mitchell, the company’s spokesman in Australia.

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