By Lucy Craymer
WELLINGTON--China's Huawei Technologies Co. has had a rough time
persuading countries from the U.S. to Australia that its latest
communications gear doesn't pose a national security risk.
At least one small nation in the south Pacific isn't too
worried. New Zealand's biggest telephone company, Telecom Corp. of
New Zealand (TEL.NZ), this week awarded Huawei a contract to build
its new nationwide wireless network--and the government barely
raised an eyebrow.
All Telecommunications Minister Amy Adams had to say was that
the Wellington-based administration would work with operators and
suppliers to tackle security concerns if any were identified, and
that the government didn't comment on individual companies.
Some 4162 kilometers northwest across the water, in Australia,
it's been a different story.
The government in Canberra flatly cited national-interest
concerns for its decision last year to stop a Huawei unit tendering
for contracts linked to the nation's 36 billion Australian dollar
(US$38 billion) broadband network.
A U.S. intelligence report in October, meanwhile, recommended
barring Huawei and Chinese rival ZTE Corp. (ZTCOY) from making
acquisitions and supplying equipment to the country's network
operators because of the potential security risk. Both companies
deny they pose any threat.
Some in New Zealand have been irked by Wellington's cool
response to Huawei's expanding presence, which already includes 120
locally-based staff. Before the Telecom contract, the Chinese
manufacturer struck up infrastructure deals with two of the
country's mobile operators, including Vodafone New Zealand Ltd.
Over the past year, Huawei has also won two separate tenders to
supply equipment for a nationwide fiber network being partly funded
by the New Zealand government.
The nation's relative openness may well help Huawei sell its
gear in other countries that may still be harboring suspicions.
"The New Zealand taxpayer shouldn't be giving Huawei hundreds of
millions of dollars to make it easier for Beijing to potentially
spy on us," said lawmaker Gareth Hughes of the Greens Party in an
email. The Greens hold about 12% of the seats in New Zealand's
parliament and have called for an independent review of Huawei's
activities in the country.
"The government should take the real concerns raised by the U.S.
and Australian governments seriously," Mr. Hughes said.
As of January, Huawei was the world's second-biggest
telecoms-equipment supplier by sales after Sweden's Ericsson
(ERIC). The company reported this week that net profit rose 32% in
2012, and that it expected 10% compounded annual growth in overall
revenue over the next five years.
Huawei, whose founder and chief executive was a former officer
in China's People's Liberation Army, insists there is nothing
sketchy about its communications equipment and, on the contrary,
that it's among the network manufacturers most committed to
ensuring cyber security for its customers.
Telecom's willingness to deal with the company showed the
operator had full "confidence" in Huawei's products, the firm's
local spokesman, Andrew Bowater, said in an email.
"We remain absolutely committed to providing our customers with
leading technologies, both in terms of performance and network
security," he added.
As for Telecom, it said it chose Huawei's so-called
fourth-generation, long-term evolution, or LTE, technology over
others purely on strategic grounds.
"Huawei's selection was based on two main factors," Telecom's
Chief Technology Officer David Havercroft said. "The first is that
they have extensive experience, the second is that they are truly
pushing the boundaries of LTE."
Huawei said it has sold 73 of its LTE networks already in 42
countries, including Germany, Norway and Hong Kong.
Concerns over computer hacking have been mounting globally, with
China frequently in the spotlight. A separate U.S. intelligence
report in November 2011 said hackers from the country, including
some associated with the government, were among the most "active
and persistent" perpetrators of industrial spying.
The report cited a string of China-based attacks, including one
that targeted Google Inc. (GOOG), and the theft of data from global
energy companies.
Toward the middle of last year, the chief of the North Atlantic
Treaty Organization, or NATO, said Australia's government and
financial companies were routinely targeted by computer hackers,
without specifying the origin of the attacks.
Write to Lucy Craymer at lucy.craymer@wsj.com
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