The federal government has effectively blocked Chinese telcos, Huawei and ZTE, from providing equipment to Australia’s new 5G mobile phone networks, citing national security concerns.
The government said an extensive review of the national security implications of 5G had been undertaken and concluded the risks were far greater than under the current technology.
“Vendors … subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference,” acting Home Affairs Minister Scott Morrison said in a statement on Thursday morning.
The mention of “extrajudicial directions” is a clear reference to China’s lack of an independent judiciary and the National Intelligence Law Beijing enacted last year.
This law compels “all organisations and citizens” to help the country’s intelligence work.
The timing of the announcement is curious given Prime Minister Malcolm Turnbull is being challenged for the leadership by his former Home Affairs Minister, Peter Dutton, leaving most of the country distracted.
Both Huawei and ZTE were short-listed bidders for Telstra’s new 5G network, while Huawei already has extensive supplier relationships with Vodafone and Optus.
The other major vendors are Ericsson and Nokia, who would not be subject to the same “extrajudicial directions”.
The Australian Financial Review first flagged the ban on Huawei and ZTE in June, following earlier pressure from the United States.
“5G requires a change in the way the network operates compared to previous mobile generations,” the government statement said.
“These changes will increase the potential for threats to our telecommunications networks, and these threats will increase over time as more services come online.”
The government’s effective ban on Chinese telcos will be implemented through its Telecommunications Sector Security Reforms, dubbed the anti-Huawei bill.
Under the legislation the government can direct a carrier “to do, or not do, a specified thing that is reasonably necessary to protect networks and facilities from national security risks.”
The legislation passed last year despite warnings by some industry players the government would have too much power over the operational decisions of private companies.
The laws comes into effect next month.
“It’s saying it without saying it,” says Nigel Phair, director of UNSW Canberra Cyber.
“Under Chinese law, a company has to assist when asked by the government so I think it’s the correct decision.”
“They are not saying explicitly Huawei can’t participate but they are saying Huawei and any other telco, which has this requirement from their motherland, are a risk to national security.
“While in the interests of the free market it would be good to have as many players involved as possible, I think we have to wear it on national security grounds. There are just too many unknowns.”