The world’s biggest maker of telecommunications equipment is now a privately-owned Chinese company, Huawei (pronounced hwah-way), which reportedly surpassed the earnings of Ericsson and Cisco in the first half of 2012. The innovation and tenacity of China’s first global tech giant has seen it become a market leader over the past decade and bring a communications revolution to Africa. However, over the past year Western countries such as Australia and the US have called into question the company’s true motives, citing security concerns.
Huawei already serves several billion users the world over (including you) and sells its hardware and software to 45 of the world’s 50 largest telecom providers. Telstra uses its components in their products and Optus has just announced it will use Huawei to build parts of its $4.5 billion 4G network in Australia. Yet in March of this year, the Australian government banned Huawei from taking part in building the National Broadband Network, and similar actions have been taken in America and India.
Politicians and critics believe that buying Chinese made telco equipment will enable our data to be spied upon or, in the worst case, be subjected to a “kill-switch” which would be activated at a time of war to cripple a nation’s communications infrastructure. Even the Prime Minister’s comments on banning Huawei from the NBN, “[to] make sure that [the] infrastructure project does what we want it to do”, suggests that this particular point was on her mind.
This fear, however, is unwarranted. Ignoring the fact that Western-designed telco equipment is already largely made and supplied by the Chinese, there is no proof to suggest this kill-switch scenario or any special snooping abilities exist (ignoring the very obvious technical complexities with both these scenarios).
In the United Kingdom, the government has established an independent facility to test all telecommunications hardware and continues to buy and use Huawei’s products. In July of this year, hackers at the annual security conference, Defcon, showed vulnerabilities in two of Huawei’s network routers. But this hardly suggests a pre-conceived ‘kill-switch’ or sinister espionage scenario, rather just bad software engineering techniques. The truth is that vulnerabilities exist in the software of every major telco provider. This is why you must update your software.
Network equipment is complex, with a mish-mash of hardware and software components and protocols. Getting it all to ‘work’ in a reliable and harmonious manner is a serious challenge for any teclo provider, let alone worrying about building ‘secret back doors’ that, somehow, the world’s best hardware and software engineers will never detect.
Also, in many situations you don’t need special hardware to snoop on data sent over the internet. Unencrypted data can always be relatively easily obtained (for example your mobile text messages), and sensitive documents sent with the highest encryption formats are impossible to crack, regardless of whatever network they are sent through.
There are, as always, other motives at play. Wikileaks cables between US embassies released last year suggest that Telstra leaked the Huawei security story after its NBN bid was disqualified. In America, Cisco, Alcatel-Lucent, and Ericsson are neck to neck and the entry of Huawei is a very real threat to the market share of all these telco providers.
What is the best scenario? Huawei, it seems, is an innovative market leader with around 44 per cent of its workforce based in R&D in an elaborate research complex in Shenzhen, a complex that aspires to that of Google HQ or Apple HQ. The money any government saves on buying cheaper and potentially superior hardware can be invested in many other areas and the savings passed on to the consumer.
Furthermore, the world’s embrace of a Chinese technology company will have massive ramifications for its relationship with the Chinese government and potentially inspire numerous others. All of sudden shady operations, any hint of ‘hardware backdoors’, or scandalous revelations about its network software will have dire impacts on the company’s revenue. In other words, if the policy and decision makers are smart about this, a Chinese telecommunications giant could do wonders in forcing pressure on a closed Chinese government as it is in their commercial interest to avoid being seen as ‘in bed’ with the government or military.
In reality, the story of Huawei and its founder, Ren Zhengfei, who founded the company on less than 30K and originally had trouble supplying its equipment to major Chinese capitals, is one of Chinese entrepreneurship that should be held high. This is one way forward for a country that, although breeding some of the smartest minds in the world, fails to be a major technological innovator.
We are in a communications age of flux and encouraging innovative companies, regardless of their country of origin, is the only way forward for a more connected, open, and stable world.
James Alexander is an editor of Honi Soit and on Twitter: