Huawei – A threat to Australia’s infrastructure

Chief of Australian Signals Directorate says 5G network is too important for Australian infrastructure to put it at risk with Chinese involvement. 

Background 

 5G is the next - fifth-generation of mobile internet connectivity promising much faster data download and upload speeds, wider coverage and more stable connections. It is about making better use of the radio spectrum and enabling far more devices to access the mobile internet at the same time. 

Most countries are unlikely to launch 5G services before 2020, but Qatar's Ooredoo has already launch a commercial service, while South Korea is aiming to launch in 2019, with its three largest network operators agreeing to kick off at the same time. China is also racing to launch services in 2019. Regulators around the world have been busy auctioning off spectrum to telecoms companies, who've been experimenting with mobile phone makers on new services.

Huawei is the world's biggest producer of telecoms equipment. It also ranks second in global smartphone sales, behind Samsung and ahead of Apple. In July, a UK security committee warned that it had "only limited assurance" that Huawei's telecoms kit posed no threat to national security. The UK's cyber-defence watchdog - the National Cyber Security Centre - has also warned that the use of ZTE's equipment and services could pose a national security risk.

Under Chinese law, companies must co-operate with the intelligence services. Analysts therefore warn that equipment produced by firms such as Huawei and ZTE could be compromised.

Analysis 

The chief of Australia's most secretive electronic spy agency, Australian Signals Directorate (ASD) has revealed Australia's "entire" emerging 5G mobile communictions network could have been threatened if Chinese vendors had not been banned from supplying equipment.  Australia’s spy chief has explained why China’s Huawei or ZTE could not be allowed to help build Australia’s new 5G mobile network, saying a potential threat anywhere in the network could undermine the entire project.

Mike Burgess, the director-general of the Australian Signals Directorate, says if “high-risk vendor equipment” is used anywhere in Australia’s evolving 5G network, “the future communications system underpinning our water supply and electricity grid and health systems, even self-driving cars, could not be protected”. Mike Burgess has told Canberra's national security community "my advice was to exclude high-risk vendors from the entirety of 5G networks" because "a potential threat anywhere in the network is a threat to the whole network". “Getting security right for our critical infrastructure is paramount,” he said.

Burgess noted that it is more than just protecting confidentiality of information, “it is also about integrity and availability of the data and systems that we rely on in our everyday lives”. In earlier versions of mobile and fixed communications networks, ASD found ways to manage risky suppliers by locking them out of providing "core" elements, but its director general has concluded this was impossible to do with 5G where "the distinction between core" and the less significant "edge" of the network is hard to define.

According to Burgess the strategic and economic power was shifting east, as the global economy changed. Although the investments were bringing with it a wealth of opportunities for Australia, as the country advances its digital economy and trade relationships, it was also changing the industrial base Australia relied on for critical infrastructure. “It would be naive to think we can manage these strategic and technology risks by holding back change. Like everything, it is a question of finding the right balance between leveraging all the advantages that these new shifts bring – and protecting Australians, our values and our way of life.

The decision to ban Chinese companies was not taken lightly, said the chief and was supported by technical advice from Australian Signals Directorate. “Our intelligence and offensive cyber experts that led the formation of our cyber security advice”. The agency worked with operators and vendors to see if there were ways to protect 5G networks if high risk vendor equipment were present in the networks. “At the end of this process, my advice was to exclude high-risk vendors from the entirety of evolving 5G networks.”

Burgess stated that  “Our starting point was that, if 5G technology delivers on its promise, the next generation of telecommunications networks will be at the top of every country’s list of critical national infrastructure.“5G is not just fast data, it is also high-density connection of devices – human to human, human to machine and machine to machine – and finally it is much lower signal latency or speed of response.“ We will need to be open-eyed on the potential threats that any significant change of this kind poses to Australia’s most important interests,” he said.

In August, The Turnbull government quietly announced the decision to block Huawei and another Chinese firm, ZTE from supplying equipment to Australia’s 5G network, claiming it was necessary to protect national security. Marise Payne, the foreign affairs minister, said it was not targeted specifically at Huawei and ZTE but applied to any company that had obligations clashing with Australia’s national security. The government’s decision was largely overshadowed by the Liberals’ leadership ructions, but it did not go unnoticed in China. China’s commerce ministry said “The Australian government has made the wrong decision and it will have a negative impact to the business interests of China and Australia companies,”. 

When Huawei learned it would have to add an exclusion from 5G deployments to its 2012 NBN ban, the Chinese company said the ban was politically motivated."The Australian government's decision to block Huawei from Australia's 5G market is politically motivated, not the result of a fact-based, transparent, or equitable decision-making process," the company said. "It is not aligned with the long-term interests of the Australian people and denies Australian businesses and consumers the right to choose from the best communications technology available."

The United States in August restricted access for Huawei and compatriot ZTE Corp to its lucrative market for similar reasons. US senators have encouraged Canada to follow suit, while Huawei has denied that it is being similarly excluded in India.

Assessment

Our assessment is that the many intelligence agencies have raised concerns for years that Huawei, the world's largest maker of telecommunications network gear, is beholden to the Chinese government, raising the risk of infiltration. We believe that this move has added tensions in bilateral ties as Canberra had previously accused China of meddling in its domestic politics, which soured trade ties.