Australia and Huawei: Why the ban?

By now, you may have heard that Australia has excluded Huawei from the upcoming rollout of the nationwide 5G mobile infrastructure.

The decision has made manufacturers, telecommunication experts, and politicians around the world stand up and take notice. Even some consumers, including those who use Huawei smartphones and tablets, wonder what this could mean for them in the future.

The action raises a few questions that are worth asking in any case. Should you be more selective in what brand of phone you purchase? How do you go about making sure your phone is secure and that the data you share is for the eyes of the recipient only?

Here are some things you should know about Australia’s action and why the basis for that decision matters even if you live in a different part of the world.

Australia’s decision: some background and context

Over the summer of 2018, the federal government of Australia determined that including Huawei devices in the planned 5G rollout would pave the way for some serious concerns.

Even allowing for the fact that Huawei maintains a presence in the nation, the hesitancy to include the company has to do with concerns about compromising national security.

It would seem Australian decisionmakers have had a problem with Huawei going back at least as far as 2012, when the company failed to be included in the national broadband project, worth $38 billion.

Back then, Huawei claimed they were given no reason for the decision and no chance to take corrective measures. Fast forward to 2019, and Aussies are voicing their concerns about this rapidly growing smartphone manufacturer taking too firm a toehold within their borders.

The problem with Huawei

At first glance, one might presume that a democratic country like Australia would welcome an up and comer. Huawei sold more phones than Apple (54 million to 43 million) in the second quarter of 2018, snagging a 15% market share. Though impressive, that is just one metric. Keep in mind that Huawei’s revenue is still only about half of Apple’s.

So, what’s the problem? There are a few:

• Issue #1: Huawei is a Chinese company. With a long history of state-sponsored capitalism, many governments around the world are concerned that large tech companies like Huawei have too-intimate a relationship with the Chinese government.
• Issue #2: Chief Financial Officer, Meng Wanzhou, was recently arrested in Canada and faces extradition to the U.S. on charges related to violations of trade sanctions against Iran. As a fellow member of the Five Eyes Alliance, Australia allowing Huawei to take part in the 5G rollout could have been construed by Washington as giving China a backdoor into US intelligence networks.

This time around, the company was given a clear reason why they weren’t welcome to participate in the 5G project – Australian intelligence agencies don’t trust them.

Lack of trust

In advance of the 5G rollout, government officials have been evaluating providers and phone manufacturers for some time. The goal was to determine if there was any company that needed to be excluded based on the potential for security issues that could affect the country as a whole and the government in particular. Specifically, was there any potential player that could be influenced by direct or indirect instructions from a foreign power that were in conflict with Australian law.

After carefully evaluating Huawei, the decision was reached that such a concern for security existed. In this case, the concern focuses on the possibility that the government of China could seek to influence Australian politics or governmental functions through Huawei.

Denials from both Huawei and Beijing followed soon after government officials made the announcement. As of January 2019, those denials have done nothing to sway Australian officials from their position.

The Chinese way

For those who haven’t been keeping score at home in the decades leading up to this decision, let’s review why a democratic government like Australia might be reluctant to allow a Chinese business interest to embed itself too deeply (or at all) in the national technological base.

Though they always strive to put on a happy, industrious face to the world, the reality is that the Chinese communist government is one of the the most notorious for online and offline censorship and has been known to violate human rights on occasion.

You can read up on the issue here if you don’t believe it.

The bottom line concern was expressed to Cnet by an Australian government source. “It is a Chinese company, and under Communist law they have to work for their intelligence agencies if requested.”

As a supplier of 45 of the world’s 50 largest mobile networks and telecommunications operators with security products and more, Huawei has long-battled the stigma that using one of their smartphones is like sending your personal data and habits directly to Chinese intelligence agencies.

Though increasingly popular almost everywhere in the world, Huawei smartphones, perhaps thanks to the U.S. government’s open suspicion, have seen sluggish American sales so far.

Technology to the rescue? Not quite

With the growing concern that Huawei might decide at some point to essentially act as a spy for the Chinese government (if they’re not already), consumers have started asking how they can protect their privacy while using Chinese products. Namely, what protections would be afforded, if any, by encrypting traffic from a Huawei device when connected to the internet via a virtual private network (VPN)?

A VPN would, presumably, handle the issue and allow for customers – both individual and enterprise – to use Chinese hardware. The problem is that more than half of the global VPN services are owned by, you guessed it, China. If you’re starting to feel like you should re-read the novel Catch-22, you’re not alone.

As a quick review, a VPN is a subscription service that encrypts your session when you access the internet, making it theoretically impossible for an observer to decipher data that passes through this “tunnel” as anything more than an unreadable mess.

The bottom line is that if you do opt for the VPN solution, at least make sure that the one you choose is not located in China and not owned by a Chinese company. Furthermore, check the logging policy of Australia VPNs because some take it more seriously than others.

The reality is that this decision by the Australian government to exclude Huawei from the national 5G rollout is a big deal. As we’ve already alluded to, we’re not talking about a small company. With 170,000 employees operating in 170 countries and revenue of around a $100 billion for 2018, this is the 10th largest GDP per capita saying firmly, “We don’t want you at our party.”