China's Huawei urges Australia not to discriminate on telco security

CANBERRA Fri Sep 14, 2012 8:25pm BST

A Huawei logo is seen above the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore June 19, 2012. REUTERS/Tim Chong

A Huawei logo is seen above the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore June 19, 2012.

Credit: Reuters/Tim Chong

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CANBERRA (Reuters) - China's Huawei Technologies Co Ltd, which was banned from tendering for work on Australia's national broadband network, urged Australia not to discriminate against foreign communications companies.

Huawei, the world's largest telecoms company, is struggling to win business in the United States and other markets due to security concerns. Last year it was blocked from participating in Australia's $38 billion broadband network (NBN).

Though Huawei sells telecoms equipment to major carriers in Asia, Africa and Europe, competing with Nokia Siemens Networks GmbH, Alcatel Lucent and compatriot ZTE, most of its corporate clients are in China.

"With the NBN decision, I was summoned to the Attorney-General's at short notice," Huawei Technologies Australia chairman John Lord told an Australian parliamentary intelligence committee in Canberra. "We were disappointed. We were not given the reasons for the decision."

When Australia's decision was made public in March, the Australian Financial Review said Huawei was seeking to secure a supply contract worth up to A$1 billion ($1.04 billion) with NBN. The company made net profit of $1.8 billion in 2011.

Lord said while he accepted the right of governments to protect critical infrastructure, Huawei had been given no reasons for being blocked from the broadband project and had not been given a chance to respond to any concerns.

The committee is examining planned laws to streamline approvals for law enforcement agencies to tap phones and computers, and to force internet and telecommunications companies to store data for two years.

In its submission to the committee, Huawei said it was worried the new laws could discriminate against companies from a particular country, with no benefit to improving communications security.

"We believe the principle of non-discrimination should be clearly set out in any legislative reform," the company said, adding companies should have the chance to address specific security concerns.

In April, China's Ministry of Commerce expressed its concern about the Australian government decision to ban Huawei from the broadband project, labelling the decision as unfair.

Telstra Corp sold its physical infrastructure network to the government for use in the NBN for around $11 billion.

Lord also strongly defended the company's independence and said it had no links to the Chinese government.

"We are a private company. It has no government ownership," he said.

"The government plays no role in Huawei in its operational sense, or the running of the company. We are 100 percent owned by staff."

On Thursday Huawei testified before a U.S. House committee on intelligence in Washington to try to appease concerns from U.S. lawmakers.

(Reporting by James Grubel; Editing by Daniel Magnowski)

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