Bell Canada’s chief executive says his company is prepared if Ottawa forbids telcos from buying 5G equipment from Huawei Technologies because of government worries about Chinese government influence over companies headquartered there.
Both Bell and Telus have a lot of Huawei equipment in their 3G and 4G cellular networks, exclusively in their base stations. According to news reports they are worried a blanket ban on Huawei networking equipment — not only for the soon-to-be-constructed super-fast 5G network but also on their existing gear — would be very costly.
But during the company’s quarterly financial results with analysts this morning, CEO George Cope said Bell is ready at least for an adverse decision on 5G.
“As everyone knows the government is conducting a cyber security review on whether to permit the continued use of Huawei equipment for 5G. We clearly recognize the issues at play and will manage those appropriately going forward, and of course follow the law.
“For investors, it’s important to know we’ve made no selection yet of our 5G vendor, and if there was a ban or if we chose a different supplier than Huawei for 5G we’re quite comfortable all those developments would be addressed within our traditional capital intensity envelope, and therefore no impact from a capital expenditure outlook.”
Nor, he added, would the government decision affect the timing of Bell’s 5G service. No launch date has been announced. Bell is doing 5G tests.
However, unsaid in the statement is Bell’s comfort level if Ottawa banned carriers here from having 3G and 4G equipment from any Chinese equipment maker.
The Globe and Mail has quoted one financial analyst believing the federal government’s decision would only apply to 5G networks, and not order carriers to rip and replace other gear. That would be highly costly, and possibly leave Ottawa open to being sued.
Cope’s statement comes as Huawei tries to overcome news stories quoting officials from several governments around the world worried that Chinese law now requires companies there to assist its intelligence agencies when asked.
Last week the Globe and Mail carried an interview with Huawei chairman Liang Hua denied his company has any obligation to help Beijing install backdoors to Huawei equipment to collect information running across networks.
He gave the newspaper a Chinese legal opinion that said network equipment makers aren’t obliged to provide decryption tools. He also said Chinese law requires its intelligence agencies to respect human rights.
The Globe quoted Liang saying Huawei would “never do anything to harm any country, any organization or any individual.”
Also last week the president of Huawei’s carrier business group wrote to the chair of Parliament’s cross-party Science and Technology Committee to insist that his company will never use its technology to assist the Chinese government with its intelligence-gathering activities in the U.K, or any other country.
In the letter, Ryan Ding, president of Huawei’s carrier division, said China’s foreign affairs ministry has clarified that no Chinese law, including the National Intelligence Law, forces any company or empowers the government to install backdoors or spyware on telecom products. That law can’t apply to Huawei subsidiaries outside of China, he added.
Huawei has never received such a government request, he added, and if it did “we would categorically refuse to comply with it.”
The U.K. and Canada are two hold-outs in the so-called Five Eyes group of countries that have refused to allow wireless carriers to buy Huawei equipment for their upcoming 5G networks. (The other countries are the U.S., Australia and New Zealand). Because 5G offers a great boost in speeds it will open the door to new applications that aren’t yet wireless-enabled. That has led some intelligence experts to worry about the security risks of Chinese equipment in wireless networks, especially if that gear is in the network core.
For its part Beijing dismisses these fears as an attempt to restrict Chinese network equipment sales.
Carriers around the world like Huawei gear for a number of reasons, particularly because it is priced competitively against equipment from two of the biggest manufacturers, Nokia and Ericsson.
Both Canada and the U.K. oversee labs that test Huawei gear for security vulnerabilities and are advising their respective governments on a 5G equipment decision.
Last October the assistant deputy minister for IT security and the new head of the Canadian Centre for Cyber Security left the door open in an interview with ITWorldCanada.com on the decision, suggesting a lot of it will have to do with whether a secure network system could be built to tolerate any manufacturer’s gear.
Other countries and carriers are hoping to find a way not to ban Huawei from 5G networks. Last week Reuters reported that Germany’s Deutsche Telekom proposed that all critical infrastructure in that country be certified by independent labs under government oversight. Network equipment makers would have to submit the source code that runs on their equipment to a trusted third party for inspection.
But Reuters also quoted a German foreign ministry spokesperson saying that there are parts of China’s national intelligence law that worry the government.
Canada hasn’t made its 5G decision yet. Complicating the situation is China’s decision to hold two Canadians on national security grounds after Ottawa arrested Huawei chief financial officer Meng Wanzhou in Vancouver in response to a U.S. extradition request. Meng Wanzhou has been granted bail pending a full hearing. However, the two Canadians remain in custody.
