UFB supplier banned in Australia

Huawei, a major Chinese supplier of telecommunications equipment to the $3.5 billion ultrafast broadband network has been banned from supplying equipment to Australia's National Broadband Network because of espionage concerns.

The Australian Financial Review reported in a weekend "exclusive" that the Australian Attorney-General's Department had blocked the government-owned company responsible for building the A$36 billion network from using equipment supplied by Huawei on the advice of Australian intelligence agency ASIO.

Huawei has won contracts with Chorus, Wel Networks and Enable to supply equipment for the $3.5 billion UFB and the $300m rural broadband initiative.

Significant amount of Huawei-branded equipment

A significant amount of Huawei-branded equipment was evident at Chorus' phone exchange in Papatoetoe, where Chorus is trialling equipment for the UFB rollout, when The Dominion Post visited the exchange in November.

Last month Huawei won a contract to provide fibre-optic cable, ducting and Ethernet equipment for the roll-out of the network in Christchurch. The deal, with council-owned company Enable, is believed to be worth tens of millions of dollars, and followed another with Hamilton's Wel Energy, which won the contract to roll out UFB in the central North Island.

Bloomberg reported that Huawei's earnings grew 11 per cent last year to top US$32 billion, narrowing the gap between it and Swedish rival Ericsson. Its sales have already eclipsed those of France's Alcatel-Lucent.

However, United States politicians has long harboured deep suspicions about Chinese involvement in the telecommunications industry.

The US-China Economic Security Review Commission

The US-China Economic Security Review Commission, established by the United States Congress in 2000, said in an annual report that there was potential for Chinese state-owned telecommunications companies to use their products to conduct espionage, saying Chinese officials viewed them as "quasi-governmental agencies subject to government directives regarding their basic operations".

Huawei last year invited the US government to lay on the table any concerns it had about its alleged links with the People's Liberation Army, saying "falsehoods" had scuppered its proposed acquisition of 3Leaf, a small California cloud computing company.