Spark boss Simon Moutter lays down the law on Huawei

Spark boss Simon Moutter has effectively told politicians to put up or shut up on the Huawei security issue.

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The managing director today told shareholders that unless the government can table "incontrovertible evidence" that Huawei's gear poses a national security threat, the Chinese company should be allowed to pitch for Spark's 5G mobile network upgrade.

The Australian government blocked Huawei from its National Broadband Network. And it recently barred phones companies from using the Chinese giant's products as they upgrade their mobile networks to faster 5G technology.

Moutter told shareholders our government would be wrong to follow suit.

Huawei got a foot in the door at Spark after Alcatel-Lucent bungled the telco's "XT" upgrade to 3G, and it subsequently became one of its key technology partners for its 4G mobile upgrade (along with Ericsson and Cisco).

"They're a world leader in mobile technology; they're very responsive to our requirements and have provided good commercial value," Moutter told the AGM audience this morning in Auckland.

"Although we have yet to make decisions on our 5G technology partners, based on their track record with us, we see no reason why Huawei should not be among the vendors that we consider inviting into the process."

The Spark boss then laid down the law for Communications Minister Kris Faafoi, saying, "We hope that our government would not preclude them from being considered without incontrovertible evidence their technology presents a security risk."

Faafoi has said he will not rule out blocking Huawei, but his language has been far milder than Australian politicians. And GCSB Minister Andrew Little has said that New Zealand will make its own decision on the issue, independent of Australian thinking.

Speaking to the Herald ahead of Spark's AGM, Huawei New Zealand deputy chief executive Andrew Bowater said any government ban on his company's hardware (also used by Vodafone and 2degrees) would make the market less competitive and ultimately push up prices for consumers.

Bowater said there were no examples of Huawei compromising national security, despite the company being under more scrutiny than any other.

He noted that under the Telecommunications (Interception Capability and Security) Act 2013, the GCSB had to approve technology used by network operators for telecommunications network upgrades. Huawei faced similar scrutiny by the GCHQ in the UK, which shared results with New Zealand. It has passed.

Moutter also used the annual meeting to reiterate his criticism of regulated wholesale pricing for UFB fibre connections.

Despite a regulatory tweak announced last week, the monthly wholesale price Chorus and others can charge is set to rise by $1 a year from July next year.

"Let me tell you now – the retail price for fibre services will start increasing and it is going to keep increasing because the wholesale prices we pay are going to increase every year from now on. It's a massive missed opportunity for our industry and for our country that we can't repeat with 5G," Moutter said.

The Spark boss also noted that the UK and South Korea will see 5G networks in 2019, while US telco AT&T will start a rollout this year.

New Zealand needs to get a wriggle on with faster mobile networks for the sake of its economy, Moutter said.

Earlier this week, Faafoi said the government was still aiming for 5G mobile upgrades in early 2020. A spectrum auction upgrade will need to take place before network upgrades can begin. Moutter said the government needed to say as soon as possible what spectrum would be up for grabs.

Moutter also told the AGM that Spark's helpdesk chatbot, Ivy, resolved around 40% of the customer questions that came her way during October, doing the work of approx 43 staff that month.

Spark's burgeoning artificial intelligence programme had seen it develop 52 bots since November last year, Moutter said. Some handled simple automation. Others, like Ivy, were developing complex cognitive abilities.

A new economy vs old economy moment followed as a shareholder stood to observe that many people in rural areas thought "artificial insemination" when they heard "AI."

It was not immediately clear if Moutter would take the advice on board.