Chinese telecoms giant Huawei has hit back at former prime minister Malcolm Turnbull’s claim the United States played no part in his government’s decision to ban the company from supplying 5G networks.
Huawei said Mr Turnbull lulled it into a false sense of security before springing the ban on the company without notice, costing it “tens of millions of dollars” of worthless investment.
In August 2018, the federal government introduced guidance that effectively banned mobile network operators from using Huawei equipment in their 5G network, on national security grounds.
In an ABC Four Corners investigation that aired on Monday night, Mr Turnbull rejected Huawei’s claim the ban was implemented at the bequest of the US government.
“That assertion by Huawei is utterly false,” he said. “It was raised by me when I was in discussions with the [US] administration and it was something that we made a point about. It was a matter of very keen interest to us. But I want to say the proposition that we were directed or advised to keep Huawei out of our network by the US is simply not true.”
Responding to the comments on Tuesday, a Huawei spokesman said: “[I]t is a matter of public record (as reported in The Australian Financial Review on February 24, 2018) that Mr Turnbull was briefed by the US National Security Agency and Department of Homeland Security on their concerns about Huawei being involved in Australia’s 5G on February 23rd 2018.
“A further story appeared in The Australian Financial Review on March 4  quoting US Republican Congressman Michael Conway saying that US-Australia intelligence-sharing relations would be damaged if Huawei was not banned from 5G in Australia.
“We can say with absolute certainty that Huawei Australia was completely unaware of any concerns around our involvement in 5G from the Australian government until The Australian Financial Review article was published on February 24.”
Huawei also published a letter Mr Turnbull sent to Huawei Australia chief executive Xichu Zhao in July 2015, in which the then-prime minister assured Mr Zhao he had no intention of banning Huawei from supplying telecoms networks.
“I can assure you that the obligations under TSSR [the Telecommunications Sector Security Reforms] do not seek to exclude any specific supplier from offering services or equipment to the Australian telecommunications market. It is regrettable that recent media attention has led to questions from current and potential customers regarding your products and services,” he wrote.
Huawei said this assurance prompted Huawei to invest “tens of millions of dollars engaging in 5G trials in Australia with our 4G customers as well as non-4G customers, employing new staff and installing new 5G trial equipment”.
“[W]e would never have done this if we had been advised on any prospect of a 5G ban,” the spokesman for Huawei said.
Following the August 2018 ban, Huawei spent many months lobbying the government to reverse the changes, led by local chairman John Lord, a former rear admiral in the Australian Navy. But in March this year Huawei appeared to admit defeat, dissolving its Australian board and reducing its once 1000-strong local workforce by half.
The ban of Huawei equipment from 5G networks has been a headache for mobile network operators Optus and Vodafone, both of which make heavy use of Huawei’s equipment in their 4G networks. Huawei equipment is much cheaper than that provided by its two main competitors, Nokia and Ericsson. The ban particularly derailed Vodafone’s progress in starting construction of its 5G network, which it had intended to build predominantly using Huawei’s low-cost equipment.
However, the ban also may have been the deciding factor in the Federal Court’s decision to allow the merger between TPG and Vodafone, a $15 billion deal that was finalised last month after nearly two years of fighting with the Australian Competition and Consumer Commission. TPG had been in the process of building a 4G network exclusively using Huawei equipment. It cancelled construction in January 2019 because it claimed without Huawei 5G equipment, it could not upgrade the network, and it would therefore become a stranded asset.
While the ACCC rejected this account, a three-week trial in September last year convinced the Federal Court, which overruled the ACCC in February this year.