March 26, 2012 2:02 pm

Huawei seeks to overturn Australian ban

Huawei, the world’s second-largest network equipment vendor by sales, aims to convince the Australian government with generous security measures to revert a ban on the Chinese company from a large broadband project.

“We still hope we can persuade them to consider Huawei as a supplier” for Australia’s A$42bn ($44bn) National Broadband Network, the company said on Monday, adding that it intended to bid for the project’s second main contract.

Huawei said it is offering to let only security-cleared Australian citizens work on the project, grant access to its source code and let a third party conduct a security audit of its equipment.

Alcatel-Lucent won the first big NBN contract in 2010, and the government was originally scheduled to pick a second main vendor by the end of last year, but that has been delayed.

“We were told late last year that there was no role for Huawei in NBN,” Huawei said. It declined to comment on which reasons were given for the ban, but people familiar with the situation said the Australian government had made clear that concerns over potential security risks were behind the decision.

The security measures Huawei is offering are part of a package any customer can pick from. The company built a comprehensive “secure delivery” architecture in 2010 which offers international carriers a broad menu of options for security checks of Huawei equipment, control over software and access for Huawei staff in installation and maintenance.

The move came after Huawei and ZTE, its smaller Chinese rival, persuaded the Indian government to lift a temporary ban on their equipment by agreeing to strict delivery conditions including putting source code in escrow, a demand fiercely rejected at the time by other foreign vendors.

The security options the company offers were developed on the basis of measures requested by customers in the past. While operators, especially in developed markets, have chosen to use some of them, such as third-party audits and certain requirements for installation and maintenance personnel, the full option is not normally chosen, according to Huawei executives.

However, the security guarantees have done little to help Huawei overcome security concerns in the US, a market where it remains practically excluded from network equipment business with the largest operators.

Julia Gillard, Australia’s prime minister, defended her government’s decision on Monday. “The National Broadband Network is a huge infrastructure project ... and you would expect that as a government we would make all of the prudent decisions to make sure that that infrastructure project does what we want it to do and we’ve taken one of those decisions,” she said on the sidelines of a nuclear summit in Seoul, according to AFP.

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