Huawei's 5G ban is a "disappointment for the competition" – 2 degrees

The 2degree mobile telecommunications operator said that the decision to ban Huawei from participating in the deployment of the country's 5G network for reasons of national security "will be a real disappointment to the competition."

The government Communications Security Bureau today announced that it had assessed the use of Chinese company equipment in the 5G network after an approach to Spark New Zealand and had "informed Spark that a significant risk to the security of the network had been identified ".

This decision means that New Zealand is aligning with two of its allies in the global spy ring Five Eyes, the United States and Australia, by effectively banning the use of Huawei equipment in the United States. deployment of the next generation of high-speed mobile telecommunications systems known as 5G.

In a statement to the NZX, Spark said that the general manager of the GCSB had informed the company that its proposal to use a Huawei 5G equipment in the 5G access network of its network planned for Spark – a part of its cell tower infrastructure – would increase national security. risks".

"This means that Spark can not implement its proposal to use Huawei RAN equipment in its planned 5G network", according to the 2013 Telecommunications Act (interception capability and security).

A spokesperson for 2degrees said that he wanted the GCSB to clarify whether this meant that he could not use the Huawei equipment either.

"Our comments on the importance of the presence of several suppliers to ensure price competitiveness are still valid and if this announcement has a similar impact on 2degrees, it will be a real disappointment for the competition," said the spokesman. word. "2degrees is however committed to building a 5G network."

Last week, Huawei wanted to demonstrate its willingness to stay out of the "essential" elements of the 5G network, as it had done for the 4G network, where it only provides cell site technology.

In conjunction with Spark, the company deployed an innovative experimental 5G network that used Cisco equipment in the United States in the heart of the Huawei network and equipment in RAN services.

The opposition to the use of Huawei's equipment and other Chinese suppliers has long been supposed to reflect a mix of real concerns about the spying pressure for the Chinese government to which these companies might be facing and the desire of non – Chinese equipment sellers to knock Huawei out. competition. Huawei hardware is considered by Spark to be cheaper and more efficient than that offered by other suppliers.

Spark announced its intention to bring its 5G network into service in July 2020, just in time for the next America's Cup Challenge in Auckland in 2021. An essential part of this process is for the government to announce its auction schedule of the radio spectrum of the network. will need to run. The ads are due early next year.

Spark stated that it had not yet had the opportunity to consider the detailed reasoning behind the CEO's decision.

"After our review, Spark will consider the next steps to take, if any," the company said. It was convinced that this would not affect the plans to launch its 5G network by 1 July 2020, subject to spectrum allocation.

Vodafone, the other mobile operator in New Zealand, does not use Huawei equipment in its international operations.

Although Huawei's equipment is acceptable in the 4G network, speculation was expressed that it would not be allowed to participate in 5G because the "essential" elements of the high-speed network would be much more decentralized than in the 4G network, which would make them more easily accessible. likely to infiltration potential.

Spark's shares traded at $ 4.16 before the announcement. They ended the day unchanged at $ 4.12.