Huawei hit the headlines as the GCSB banned it from Spark's 5G mobile network upgrade and its chief financial officer was arrested in Canada at US request.

Here's a Q&A on the Chinese giant.

What is Huawei?
Huawei is the world's largest maker of telecommunications infrastructure technology - or the hardware and software used to run mobile and landline networks. Sweden's Ericsson and Nokia Networks (created as a joint venture between Germany's Siemens and Finland's Nokia) provide its main competition in this market.

Huawei is also the world's second-largest maker of smartphones with around 16 per cent market share, behind Samsung (21 per cent) and ahead of third-placed Apple (12 per cent). It passed Apple in terms of total units shipped last year, though it's worth noting that Apple only sells expensive phones, while Huawei sells models across the board.

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Lately, Huawei has also been getting into cloud and IT services for large organisations.

How is Huawei pronounced?
"Wah-Way"
Who founded it?
Huawei was founded by Ren Zhengfei, 74, technology-focused engineering researcher in China's People's Liberation Army (PLA). His official corporate biography says he rose to "a professional role equivalent to a Deputy Regimental Chief, but without military rank." He left the army in 1983 and founded Huawei in 1987 with, reportedly, just $10,000. The company prospered as it won work as China sought to modernise its telco networks. The Far Eastern Economic Review reported that Huawei also won a contract to build the first nationwide network for the PLA.

What's the beef against Huawei?
Huawei's foes allege it uses its technology for espionage, working hand-in-glove with the Chinese government.

Huawei NZ deputy chief executive Andrew Bowater says no evidence has ever been tabled to back these assertions, which he says are motivated by politics and protectionism.

The Chinese company's sharpest challenge came from US network technology company Cisco, which for 20 months pursued a case alleging Huawei had copied its source code. The case was settled in 2004.

What about Huawei smartphones?
Even most of Huawei's most strident foes have focused on its network infrastructure, but earlier this year a US Congressman introduced a bill to ban US government agencies from using phones and equipment from Huawei or a second Chinese company, ZTE.

And AT&T dropped its launch for Huawei's flagship Mate 10 handset, apparently under political pressure. The other two main mobile network operators, T-Mobile and Verizon, followed suit.

However, the bill has not gone anywhere and Americans can still find Huawei handsets, even if the main carriers are decidedly tepid in their support. You won't find Huawei smartphones on AT&T, T-Mobile or Verizon's websites (a notable contrast to Spark, Vodafone and 2degrees here) but they are all over Amazon and other sellers.

Flashback to 2016: Huawei Asia Pacific President Mr Li Jin'ge, Prime Minister John Key and Phoenix Chariman Rob Morrison celebrate New Zealand's largest football sponsorship deal. Photo / Huawei.
Flashback to 2016: Huawei Asia Pacific President Mr Li Jin'ge, Prime Minister John Key and Phoenix Chariman Rob Morrison celebrate New Zealand's largest football sponsorship deal. Photo / Huawei.

Who championed Huawei in NZ?

In July 2010, then Prime Minister John Key returned from the Shanghai World Expo brimming with enthusiasm for Huawei, and its potential to supply hardware for New Zealand's Ultrafast Broadband (UFB) rollout, which was due to kick off the following year.

He told TVNZ's Q&A that Huawei could potentially play "a major role" in the public-private fibre project.

"No one's saying they would be the final selected partner in New Zealand but they've certainly got the capacity if they wanted to," Key said. Sounding for all the world like a Huawei salesman, he went on to detail how the Chinese company was already supplying Vodafone and 2degrees. Huawei would represent "Value for money ...They've got a lot of expertise in that area, Huawei is a big player," the then PM said.

How big is Huawei today?
Huawei has around 180,000 staff (including around 150 in New Zealand) and saw its revenue grow 15 per cent to $133 billion last year. It made a profit of $10.6 billion (also a big jump, but partly due to foreign exchange movements).

Who are Huawei's customers in NZ?
2degrees embraced Huawei as it built its mobile network, which launched in 2009. Today, Huawei continues to be the telco's main technology provider, and 2degrees has gone into bat for the Chinese company during the current 5G controversy.

Spark turned to Huawei as one of the key suppliers for its 4G mobile network upgrade after Alcatel-Lucent (later bought by Nokia Networks) duffed its 3G launch, which was branded as "XT".

Vodafone has used some Huawei gear, including for its "Red" landline network, but Nokia Networks has been its main technology partner.

UFB companies Enable Networks (which hold the UFB contracts for Whangarei, the central North Island and Christchurch respectively, all followed Key's queue and embraced Huawei. Chorus, which is in charge of the UFB rollout in most other areas, went with Alcatel-Lucent (absorbed into Nokia Networks in 2016). In Whangarei, Northpower Fibre went with US supplier Calix.

"We would never ban a particular company or a particular country," GCSB Minister Andrew Little says. Photo / Stuart Munro.

What's the story with NZ's ban?

Although John Key helped expand Huawei's business here while GCSB Minister, he was also one of those behind the legislation that could be its downfall: the Telecommunications (Interception Capability & Security) Act 2013 or "Ticsa" - a law that requires network operators to run proposed technology upgrades past the GCSB.

Spark wanted to put a proposal to use Huawei technology for its pending 5G mobile network upgrade in front of the GCSB - but the security agency vetoed it, saying it posed a "significant national security risk" (which was not detailed).

GCSB Minister Andrew Little told the Herald that Ticsa is "project-based. We would never ban a particular company or a particular country. That's not the way it works."

The decision was specific to a Spark proposal to use Huawei gear for its pending 5G upgrade to its mobile network.

He had no issue with Huawei gear that's already in Spark and other telco's networks or, potentially, different Huawei technology being used in future upgrades; Spark could still work with Huawei to address the security risk with 5G, the GCSB Minister said.

However, Little was fuzzy on whether Spark could be fully briefed on the exact nature of the "significant national security risk" and an insider at the telco was dubious a workaround could be reached; the company had released a statement to the NZX on the ban because it felt it had hit the end of the road.

Political pressure kept a lid on Huawei's North American sales last year, but wordwide it was well ahead of telco network infrastructure rivals Ericsson and Nokia Networks.
Political pressure kept a lid on Huawei's North American sales last year, but wordwide it was well ahead of telco network infrastructure rivals Ericsson and Nokia Networks.

Where else has Huawei technology been blocked?

Australia barred Huawei from its National Broadband Network (NBN) - its equivalent of our UFB. It has also blocked Huawei from international cable projects involving a landing in Australia, and from telcos' pending 5G mobile upgrades.

US security agencies also have long-standing advisories against American telcos' use of Huawei gear. On November 28 it was reported that the US had turned its attention outward with a campaign to persuade allies to block Huawei.

In the UK, MI6 has said it is up to the government to ban Huawei, or not - but in the meantime BT has said it will not include Huawei gear in its 5G upgrade - and, more, that it will strip Huawei kit from its existing 4G and 3G mobile networks (Little told the Herald he understood the our GCSB did not see that as necessary).

Huawei has previously touted Canada a friendly country, but the Canadian government's arrest of Huawei's CFO in Vancouver, at the behest of the US, has now cast a shadow.

Previously, the countries in the Five Eyes alliance (the US, Canada, the UK, Australia and NZ) were split down the middle on Huawei. Now they all seem to be falling into line, international security expert Paul Buchanan says.

Meng Wanzhou - Huawei's CFO and deputy chair, and the eldest of its founder's three children - was arrested in Canada on Wednesday at the request of the US.
Meng Wanzhou - Huawei's CFO and deputy chair, and the eldest of its founder's three children - was arrested in Canada on Wednesday at the request of the US.

Why was Huawei CFO Meng Wanzhou arrested?

Officially, we don't know. Unofficially, the word is that the US suspects Huawei has been undermining sanctions against Iran (an accusation the White House made publicly earlier this year).

Meng - the daughter of Huawei's founder - was arrested on Wednesday local time by Canadian authorities at the request of the US, which is seeking extradition. A bail hearing is set for later today.

China has asked for Meng's release. Canada, backed by the US, has so far refused.

The politically-charged standoff has roiled stock markets, and threatens the fragile truce in the US-China trade war. If Men is extradited to the US, the situation seems sure to escalate.

In May this year, US President Donald Trump confounded Congress by going into bat for Huawei rival ZTE, which was accused of sanctions-busting. Photo / AP.
In May this year, US President Donald Trump confounded Congress by going into bat for Huawei rival ZTE, which was accused of sanctions-busting. Photo / AP.

What happened to Huawei rival ZTE?

Last year, the US accused another Chinese telco maker, ZTE, of busting sanctions against Iran and North Korea.

President Donald Trump caught Congress - and all-comers - by surprise by going into bat for ZTE, pointing out that it bought many of its components from American companies - an unusual acknowledgement of the global supply chain that remains starkly at odds with Trump's usual narrative.

But it wasn't enough to stave off the political heat.

In an effort to save its North American business, ZTE agreed to a US$1.2b plea deal. But it wasn't enough to placate American lawmakers who blocked its exports - contributing to the Chinese firm announcing it would be forced to suspend major operations.

But in July, ZTE bounced back from the dead as Trump persuaded Congress to drop its seven-year ban.

It was a curious episode, and one that will perhaps give Huawei hope that it can navigate its way through its current controversy.