By now, that includes Huawei being in 170 countries as the world’s biggest supplier of telecommunications equipment and the second largest supplier of mobile phones, with revenue expected to be more than $US100 billion this year.
In Australia, Huawei has grown to become the third largest supplier of mobile phones – just under half a million of them so far – and is also the key supplier to Optus, Vodafone and TPG for their 4G equipment. It also plans on a major new advertising campaign to help support its Australian growth next year, starting with Christmas TV advertising this week.
But security agencies, especially in the Five Eyes intelligence network of the US, Australia, Canada, Britain and New Zealand, have become increasingly vocal about the risks of using Chinese equipment for 5G, particularly given the multiplying digital connectivity with other crucial infrastructure and businesses. Nor do they put any faith in Chinese adherence to law or international rules against cyber hacking and theft given the evidence of China’s practices over recent years.
It means Huawei can defend its 30-year history on detailed technology and commercial grounds but the gathering opposition to its further expansion, including in 5G, is based on more amorphous political and security risks in future.
Ironically, Lord cites Huawei’s technology as the best defence against the prevalence of cyber hacking and spying globally as part of the company’s appeal to telcos. Huawei, he says, holds the lead in cyber security defence mechanisms in certain areas, though not all, which is another reason why vendors are buying its equipment.
“Our aim is to build the best technology to defend against all attempted hacking of our equipment,” he says.
But he concedes the rising criticism of China’s activities makes this sell more difficult.
“The continued reference to only China in this [debate] makes it harder for Huawei to get out there and say, ‘hey, we are a Chinese company but we are independent and we do make the best equipment in the world’.”
According to Lord, Huawei is in part a victim of its own success because it has grown so fast and so successfully and is so far ahead in certain technologies that it has caught people – especially the US – off guard.
It is quite obvious, he says, US security agencies are conducting a concerted campaign to damage Huawei and are exerting influence on US allies to do the same.
As part of its expansion into Australia, Huawei deliberately recruited an independent board of impeccable political credentials in 2011. As well as Lord, it included former Victorian premier John Brumby and former foreign affairs minister Alexander Downer, prior to his appointment as High Commissioner to the UK.
“The directors did our due diligence,” Lord says. “There have been accusations made on and off over the last seven and half years and whenever we required clarification from company headquarters, they have given it – a full explanation of the real facts around these allegations … and we have been totally satisfied with the response.”
But among Western allies, tensions about China’s intentions and behaviour and Huawei’s potential role have dramatically increased over the past year, culminating in last month’s arrest of Meng Wanzhou, its global CFO and daughter of its founder, while in transit in Canada. China has retaliated against three Canadian citizens so far – but not yet against US citizens as it negotiates the trade war.
The US has long banned Huawei’s equipment but New Zealand has also just blocked Huawei from 5G as well, while Canada is under pressure to announce a similar move within a few weeks despite a well-established relationship with the company.
In Britain, BT has consistently used Huawei technology but only in less sensitive areas, known as the non-core network, including radio access equipment like radio towers and base stations. Lord says it’s still “business as usual” in the UK despite growing suggestions Britain too may ban Huawei altogether from 5G.
Huawei’s global chairman, Ken Hu, held a rare press conference in Shenzhen this week to dispute accusations its equipment poses a threat and challenging its critics to come up with evidence rather than rely on “ideology and geopolitics”.
Despite the growing political pressure, Lord maintains he is “frustrated” that Australia is missing opportunities by blocking Huawei’s technology from 5G just as it was blocked from the NBN, reducing competition in innovation and price in both cases.
He argues it’s possible to put a security assurance framework around the technology and Australia is limiting itself unnecessarily given our regional competitors won’t miss the opportunity of using Huawei equipment.
“I still go to Canberra and most people I used to know still smile at me and shake my hand,” Lord says. “Agreed, there are a few who do not … but I am almost re-energised because I see some really stupid statements being made out of Canberra. I am disappointed. All of us in business, not just the telecommunications industry, have got to get the balance back into this argument.
“National security is important but so is trade and it is part of being in a secure country. At the moment, we are getting one side … as an Australian I think that is very concerning.”
One of the key arguments used for Huawei’s exclusion from 5G is the assessment from the Australian Signals Directorate that it will no longer be possible to separate the core transmission network from the non-core network. Lord says this is completely counter to the findings of the international body responsible for designing global standards for 5G. Vodafone, TPG and Optus had all been operating on this basis until the government announced its decision to block Huawei based on the ASD advice on the penultimate day of Malcolm Turnbull’s prime ministership.
Lord’s only consolation is to say the business case for 5G will take longer to establish than originally anticipated, making the shift a gradual evolution rather than a revolution. Huawei’s Australian revenue split of 70 per cent coming from the supplying the telco carrier network will be little changed next year, according to Lord.
“It is a classic case where the technology has leapt ahead of the business case,” he says. In his view, that translates into Huawei continuing to deliver a lot of the “internet of things” infrastructure over ever more sophisticated 4G equipment to telcos for some time yet.
“5G will be gee-whiz on a phone in the very near future but real business applications are probably several years away and we will see industry be honest and discuss that more and more as 5G comes to be implemented.
“And in mobile we are hoping to grow more and more and that is doing very well.”
The politics less so.