Huawei sends mixed messages over quitting NZ as its smartphone sales tank in Europe
Tuesday, 13 August 2019
Chinese technology giant Huawei has confirmed it warned the Government it might leave New Zealand if it continued to be blocked from working on 5G upgrades.
However, Huawei has at the same time announced a new sponsorship deal with the Wellington Phoenix which will see the company's brand stay on Phoenix players' shirts next season.
The Government Communications Security Bureau (GCSB) last year denied Spark permission to use Huawei equipment to upgrade its mobile network to 5G because of an undisclosed 'significant network security risk'.
Huawei New Zealand said its managing director Yanek Fan wrote to GCSB Minister Andrew Little and Communications Minister Kris Faafoi in July.
In the letter leaked to NZME, Fan said that if the 5G block remained it would have a significant effect on Huawei NZ's revenues 'to the point where there is a real risk that Huawei New Zealand may not be able to continue to operate in the New Zealand market'.
**READ MORE:
* Huawei staff left in tears following GCSB decision, boss says
* Huawei has to find an alternative that doesn't really exist**
Huawei NZ deputy managing director Andrew Bowater struck a different tone announcing its renewed sponsorship deal with the Phoenix last week, saying the company was 'excited to reaffirm our commitment to Wellington and New Zealand through this partnership and proud with how we have stood steadfastly together since 2013'.
In addition to possible blocks on building 5G networks in some western countries, Huawei has also taken a hit as a result of United States government moves to make life difficult and unpredictable for US technology companies supplying components and software to Huawei.
British analyst Canalys reported on Monday that Hauwei's share of the European smartphone market plummeted by 16 per cent in the three months to the end of June, in the wake of that policy, with Korean rival Samsung the main beneficiary.
Spark spokesman Andrew Pirie said it had not yet decided whether to try to address the GCSB's concerns and resubmit a revised plan to use Huawei equipment for 5G.
Should it do that, the final say on whether Huawei is blocked from 5G in New Zealand could fall to Little, who would be entitled under legislation to take into account wider issues than those considered by the GCSB, potentially including the impact on 2degrees which also wants to upgrade to 5G and has Hauwei equipment at the heart of its network.
Pirie said Spark was 'still in occasional dialogue with GCSB' and still deciding what to do.
He would not comment on whether Spark believed the possibility of Chinese intervention in pro-democracy protests in Hong Kong could have a bearing on future developments.
'We wouldn't want to assume anything given the GCSB has made it clear their decisions are security-based and not politically-based,' he said.
In an effort to alleviate the GSCB's concerns, Huawei has previously suggested it could invest millions of dollars in a 'cybersecurity evaluation centre' that would be under the control of the GCSB and which could vet 5G and other equipment supplied by the company and potentially other vendors.
It has also said it would be open to using only New Zealanders rather than Chinese workers to build 5G mobile networks here, if that helped assuage spying concerns.
Commenting on Huawei's warning it might pull out of New Zealand, Little said he was not responsible for the commercial decisions of private companies.
Little said he had read Fan's letter and that Huawei had requested it be treated as 'commercial-in-confidence'.
It would be inappropriate for him to meet with Huawei regarding the process underway between the GCSB and Spark, he said.
'The Telecommunications Interception Capability and Security Act (TICSA) provides for that process to be commercial-in-confidence between the GCSB and the Spark. Huawei is not a party to that process.'
Under act, which was passed by Parliament in 2013, telecommunications firms need to engage with the GCSB before making changes that could impact network security.
In May, Bowater said the GCSB's decision to block Huawei from rolling out 5G in New Zealand damaged the company's brand and left many of its 150 staff in tears.
Huawei is a Chinese cooperative started in 1987 in Shenzen, China. It operates in 178 countries, has 32 commercial 5G contracts signed globally and employs 180,000 staff. It has had an office in New Zealand since 2005.