Hamish Fletcher

Business reporter for the NZ Herald

Huawei rolls on despite spy controversy

Huawei Ideos mobile phone. Photo / NZH
Huawei Ideos mobile phone. Photo / NZH

Chinese telecommunications giant Huawei seems to have emerged unscathed from suggestions last year it could pose a security threat to this country.

The Shenzhen-based company courted attention in New Zealand last March after it was revealed Australia had banned Huawei from tendering for its broadband network because of concerns about potential cyber attacks.

Later that year, international media reports sounded alarmist messages over Huawei's rise to dominance in telecommunications markets. The Economist reported that security experts feared Huawei's network equipment "could be used by China's spooks to eavesdrop on sensitive communications, or that it might contain 'kill switches' which would allow China to disable the systems involved in the event of a conflict''.

This was followed in October by a report from the United States House Intelligence Committee warning US firms not to do business with Huawei and another Chinese telecommuni cations firm, because of fears of spying, corruption and links to China's military and government.

Although this resulted in an uproar from opposition parties and a call for an inquiry into Huawei's role in New Zealand's billion-dollar ultra fast broadband (UFB) scheme, no action was taken by the Government.

Indeed, nothing appeared to come of this seven months' worth of controversy _ it did not stop Huawei signing a US$56 million (NZ$66.5 million) deal with Auckland headquartered components-maker Rakon last August. The partnership will see Rakon quadruple its sales of frequency-control products to Huawei over the next four years; these will be used in telco infrastructure and the Chinese company's smartphones and GPS devices.

The fears also didn't stop Huawei from participating in Telecom's 4G trial in Auckland and Rotorua, which began last December.

A spokesperson for Huawei said the company was bidding for the tender to rollout the entirety of Telecom's 4G network.

Though details about this upcoming deployment are scant, Telecom said an announcement about the 4G network would be released in the coming weeks.

Earlier this year, Huawei opened its books on its 2012 financial performance as part of an effort to increase transparency.

In this disclosure, it reported its annual profit had risen 33 per cent to 15.4 billion yuan.

At the same time, Huawei said it was keeping an open mind towards an initial public offering in what analysts said would go a long way to improve the perception of the company internationally.

Though the company received a good deal of media attention here last year, it has been present in New Zealand since 2005.

It secured contracts in 2011 with Chorus to supply equipment for the Government's rural broadband initiative.

In the same year it scored major supply deals with Enable Services and Ultrafast Fibre Ltd, the Government's private partners for UFB scheme in Christchurch and the central North Island.

Its technology is also the cornerstone of 2degrees' mobile infrastructure and Vodafone's fixed-line network.

- NZ Herald

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