Concerns from the GCSB or other security agencies can be mitigated, says the ICT giant.

Huawei has played a central role in New Zealand's telecommunications infrastructure for a decade. The company's New Zealand deputy managing director, Andrew Bowater, says it started working with 2degrees four years before the telco's network was switched on in 2009.

The 2degrees partnership played a crucial role when in 2013, Telecom, now Spark, chose Huawei's hardware to power its 4G mobile network. Bowater says; "We wouldn't have won that without 2degrees, we wouldn't be here today without them."

That relationship cuts both ways. Huawei provided 2degrees with the money needed to build its network with a vendor finance arrangement. Bowater says the two companies passed an important milestone in 2013 when a local bank bought the debt off Huawei.


Huawei's relationship with Spark went deep. The two worked together to break new ground, they were the first to use 700 MHz spectrum for a 4G mobile network. New Zealand got that ahead of the world. Likewise, they were early getting 4.5G technology to market.

In many respects, Huawei helped Spark recover a quality reputation that was severely dented earlier when another network supplier, Alcatel-Lucent, built the company's XT network which suffered outages during its early years. Bowater says in the 13 years Huawei has done business in New Zealand, there have never been issues with network outages on its equipment.

When Spark's XT network failed, the company had outsourced control of the network to Alcatel-Lucent.

The arrangement with Spark means that Huawei only supplies hardware and support. Bowater says: "They manage the network, we're hands off. There's a perception in the market that we manage things, but that's wrong. We stay away from areas that are sensitive."

This applies elsewhere. A mobile network like Spark's has two main components. There's the edge network which includes cellular towers and the lines that backhaul traffic to exchanges. This is the part where Huawei plays a role. The company's hardware transmits and receives cellular traffic.

Huawei supplies the radio access networks or RAN systems.

These deal with moving voice or data traffic from phones to the other main part of a mobile network; the core network. This is sometimes called the backbone.

The core network is where there are routers and switches. In effect, this is the brain of the network. The core is the part that security experts are more concerned about.

Bowater says Huawei doesn't provide Spark's core for the 4G network. The company uses hardware from Cisco, an American company, for this. Though some engineers argue that it makes sense for a single supplier to handle the entire network, this kind of two-handed arrangement is quite common.

Bowater says that during the five years Huawei has worked with Spark, there have never been any inter-operational issues between the two.

Today Huawei dominates New Zealand's market for mobile network equipment. It took only 10 years to take a 40 per cent market share.

Huawei trades with all the main telecommunications players and many of the smaller ones. As well as handling the majority of cellular phone calls and mobile broadband traffic, Huawei kit also powers the Ultrafast Broadband network. The company was also pivotal when Vodafone and Chorus won the contract for the first stage of the Rural Broadband Initiative.

Many ISPs provide customers with Huawei routers, both Spark and Vodafone use Huawei kit to deliver wireless broadband. As Bowater says: "A lot of New Zealanders come into contact with Huawei products at some point."

On top of all that, the company's consumer division sells New Zealand's third-favourite mobile phone brand. The Huawei name and logo sits on a central Auckland office tower and the Wellington Phoenix's football shirts.

Huawei opened shop locally in 2005. Bowater says at first it was just four guys working above a Thai restaurant. Its first big customer here was ihug, at the time New Zealand's third-largest internet service provider. It was later acquired by Vodafone and still forms the basis of that company's broadband business.

Bowater says Huawei New Zealand is now a $200 million operation employing around 150 people. This makes it one of the larger technology employers, and a significant contributor to the economy.

Huawei has a strong case when it pitches for 5G hardware business. Bowater says: "We've been working on 5G for years. We've pushed hard and we now lead the way. Everyone knows our technology is the best, the latest, the greatest.

"We're able to deliver speeds that are significantly faster than our rivals. Our reliability stands up well against the rest of the market. Our prices are competitive."

That competition is vital in a market where there are only two credible alternatives to Huawei: Nokia and Ericsson. Without the tension Huawei brings, prices are likely to rise.

Although some media coverage both here and overseas talks about there being a ban on Huawei supplying 5G network technology to Spark, it's more complicated than that.

Communications Minister Kris Faafoi uses carefully measured language to explain that, at the time of writing, Huawei has yet to pass a crucial security certification process. This is still unresolved.

Many other countries don't have a problem with Huawei. Its network hardware sells in Europe, Asia, Africa and the Middle East. Huawei is already building 5G networks in countries like Switzerland, South Korea and Spain. The main problem is with the US and the nations that are part of the Five Eyes security alliance; although, one of those countries, the UK, appears open to Huawei's 5G technology with two carriers looking to use it.

Huawei has already said it doesn't want to supply core network hardware. The company has worked with Spark to demonstrate its edge systems can link back to another supplier's network core.

Bowater says any concerns from the Governments Communications Secuirty Bureau (GCSB) or other security agencies can be mitigated.

"We accept there's a cost. We know that we need to go above and beyond, that we face higher levels of scrutiny. It's in everyone's interest to make this work," he says.