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‘Little to nothing’ so far to substantiate security risks posed by Huawei: Analysts

Ecosystm principal analyst Claus Mortensen says while the argument about national security is “valid”, there is so far little to nothing to substantiate these claims.

‘Little to nothing’ so far to substantiate security risks posed by Huawei: Analysts

FILE PHOTO: A woman stands at the booth of Huawei featuring 5G technology at the PT Expo in Beijing, China September 28, 2018. REUTERS/Stringer

SINGAPORE: The regulatory scrutiny by various governments on Chinese telecoms equipment giant Huawei Technologies has been building in recent times, but analysts said this is as much a political issue as it is a technology one and there is “so far little to nothing” to substantiate the national security claims made.

READ: What is China's Huawei Technologies and why is it controversial?

Mr Claus Mortensen, principal analyst at research firm Ecosystm, told Channel NewsAsia on Friday (Dec 7) that the heightened regulatory scrutiny is, at its core, a “highly politicised issue”. He said the national security argument is a “valid” one, and few countries in the Western world would choose to buy important communications infrastructure from countries like China or Russia.

“That said, there is so far little to nothing to substantiate these security claims,” Mr Mortensen pointed out.

He referenced another instance when Bloomberg ran a story in October claiming that China had inserted rogue chips into servers used by US companies like Apple and Amazon – which did not implicate Huawei but fed the narrative of Chinese tech companies serving as an extended arm of its government.

“No actual proof has been presented (in the Bloomberg claim) and the same goes for Huawei’s equipment,” Mr Mortensen said.

Another analyst, IDC’s Nikhil Batra, said is “a bit difficult to comment” on the specific threats national agencies in the UK or Australia are referring to given that details have not been shared.

Theoretically though, 5G mobile networks do pose fundamental challenges when compared to 4G ones, with virtualisation being one of the biggest differences, the analyst said.

“Since a lot of elements in (a 5G network) will be virtualised, it allows for remote control of the network assets,” Mr Nikhil said.

Mr Mortensen added that with the impending shift towards the next generation of mobile networks and the Internet of Things, stakes have gotten bigger.

“If a foreign government had backdoor access to a country’s 5G infrastructure, the amount of data that could be spied on and the services that could be disrupted are dramatically increased,” the Ecosystm analyst said.

Already, 5G networks are being touted to benefit sectors like public safety, healthcare and logistics among others. In Singapore, there are plans for 5G to power the launch of autonomous commercial vehicles, drones and remote healthcare services.

The caveat however, IDC’s Nikhil added, is that standards bodies like 3GPP have been working for more than 10 years with more than 180 major tech vendors and service providers to define all the standards for 5G, including security.

Huawei has been under the spotlight this week, after the head of the UK’s secret service Alex Younger on Monday highlighted security concerns over the Chinese vendor, and said that the country had a decision to make over how comfortable it is with Chinese ownership of the networking technologies.

This was followed by UK telco BT saying it will remove core equipment by the Chinese company from its 4G network within two years, and exclude it from bidding for contracts to supply equipment for the next-generation 5G network.

READ: BT to strip China's Huawei from core networks, limit 5G access

On Friday, Huawei agreed to demands by UK security officials to address serious risks found in its equipment and software in order to still sell its 5G networking gear, according to another FT report.

On the same day, sources told Reuters that Japan plans to ban government purchases of equipment from Huawei and another beleaguered Chinese vendor ZTE. Japanese paper Yomiuri said separately that the government is expected to revise its internal rules as early as next Monday.

READ: Japan to bar Huawei, ZTE from govt procurement contracts, sources say

These developments follow similar actions by New Zealand late in November to reject a plan by its largest telco Spark to use Huawei’s gear in its 5G networks citing “significant national security risks”.

Huawei was founded in 1987 by CEO Ren Zhengfei, who was in the People's Liberation Army's now-defunct Engineering Corps and held the military equivalent position of Deputy Regimental Chief but without military rank. It is this connection with the country's military that is regularly held up as a national security concern over the years.   


Ecosystm’s Mortensen said it is “hard to ignore” that several Western companies have much to gain from Huawei being barred access to several large markets. The other major telecoms equipment makers today include Finland’s Nokia and Sweden’s Ericsson.

“With the ongoing trade war dispute between the US and China, it is hard to disregard the possibility that Western governments might have fewer security concerns about Huawei’s equipment if the Chinese market were more open and accessible to foreign vendors,” the analyst said.

READ: US and China agree to trade war ceasefire, more talks

The US-China trade war is also not just about tariffs but about tech supremacy and having a larger say in how the future technology landscape will look like, said IDC’s Nikhil.

He said it has been a “tight race” between both countries for 5G leadership and with China “nudging ahead” in the race, the US has been contemplating putting federal funds to play to support accelerating the technology.

“There will be some impact on China’s 5G ambitions, but we’ll need to wait further to see how this situation develops,” the analyst added.

He did point out though that excluding Huawei from nationwide implementations, as seen in the US, Australia and New Zealand, will have a big impact on the overall telecom industry.

“The number of network equipment providers in the industry is quite small,” Mr Nikhil said.

“And in a market so small, going down from possibly three major vendors to two would be big: Competition decreases, costs for telecom service providers would increase (and) innovation would decrease.”

On its end, Huawei has been steadfast in its responses to these challenging developments.

A company spokesperson told Channel NewsAsia in an email on Friday that “cybersecurity should not be politicised and equipment vendors should not be treated differently based on country of origin”.

“Today, the ICT supply chain is highly globalised,” the spokesperson added. “Limiting one vendor does nothing to help the industry more effectively identify and address cybersecurity threats.”

The company added that it remains committed to developing “trusted and secure solutions for its customers”, and pointed out its 5G equipment is already being deployed by major carriers around the world.

Singapore’s M1 is one of these partnering carriers, and in June, both parties announced they plan to showcase 5G use cases here, including a live broadcast of virtual reality content using Huawei’s 5G gear. They also plan to kick off the further field trials in the first quarter of 2019, the spokesperson said.

M1 declined to comment for this article.

Local regulator Info-communications Media Development Authority (IMDA) told Channel NewsAsia on Thursday (Dec 13) that it encourages telcos, including mobile network operators, to have a diverse range of vendors to mitigate the risk of over-dependence on any one of them. 

"In addition, operators should ensure that the performance and reliability of equipment purchased from vendors meet their commercial operational needs and IMDA’s regulatory requirements," an IMDA spokesperson added.

Source: CNA/kk(gs)


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