The government’s tough line on banning Chinese technology in the high-speed 5G network could force telecommunications companies to spend billions of dollars in retro-fitting as TPG boss David Teoh warned “[on a] Huawei 4G network you cannot connect even a piece of wire to any 5G network”.
Mr Teoh has spent two years and $100 million creating the country’s fourth mobile network but on Tuesday blamed the government’s ban on Chinese suppliers for scrapping his plans.
TPG had used Huawei equipment since announcing the launch of the country’s fourth network in April 2017, with hopes its small-cell technology could be quickly upgraded to 5G in the future.
This plan no longer works under a widespread ban on Huawei, Mr Teoh said, with the government’s decision making his long-term strategy “impossible”.
“We did go through the process in the last few months to look at all the implications of the government ban. Now, Huawei 4G networks can’t connect to any 5G network,” he said.
“We understand from the government’s side it’s impossible. [On a] Huawei 4G network you cannot connect even a piece of wire to any 5G network. It is impossible. It is a very serious issue.”
Mr Teoh also thinks other telcos have been hard-hit by the decision.
“Everyone is affected, everyone,” Mr Teoh said.
“I think if you ask them, everyone has to replace them. They have to,” he said, “You cannot connect the Huawei 4G to the 5G at all.”
Optus and Vodafone use Huawei equipment within their 4G networks and the ban has left some providers confused about how this existing infrastructure will be able to work alongside 5G kit. Telstra does not have any Huawei kit in its mobile networks.
The government banned suppliers like Huawei in August from participating in 5G on security grounds as the new networks are expected to increasingly connect critical infrastructure.
Huawei director of corporate and public affairs Jeremy Mitchell said the business had not had any “detailed conversations” with the government since the ban was announced.
“The 4G and 5G networks need to talk to each other. We are the biggest provider of 4G in Australia,” he said.
Very few companies are choosing to build a 5G network standalone without a pre-existing 4G network, he said, simply because “the costs are just too great”.
Telcos are all required to work to the same legislative requirements, however there are different ways a 5G network can be structured. One way to provide 5G services early in the network’s development is to “bolt on” 5G antennas and equipment to 4G kit, however this could be off the table if Mr Teoh’s assessment is accurate.
A spokeswoman for the government said 5G represented opportunities for an economy-wide transformation.
“The government is committed to protecting this vital technology,” she said.
“While the government wants to realise the full benefits of 5G, we need to ensure that Australian’s information and communications is protected at all times.”
Optus declined to comment.
Huawei is the world’s largest telco equipment manufacturer.
It has faced worldwide scrutiny, particularly from ‘Five Eyes’ countries (a cybersecurity alliance including Australia, New Zealand, the US, UK and Canada). New Zealand imposed a ban last year, while the US Justice Department has accused Huawei’s chief financial officer Sabrina Meng Wanzhou and the company of bank and wire fraud and conspiring to steal trade secrets.
Over the weekend, Vodafone’s global parent company put a “pause” on using Huawei in the core of its network, though warned there would be issues with any government-imposed bans in the radio part of the network. Local media representatives declined to comment further about the ramification of the government’s bank on its Australian 5G roll out, though chief strategy officer Dan Lloyd said in a statement the provider had “already taken into consideration the impact of the government’s decision”.
“While national security is of paramount importance, we have always been clear that we believe the restrictions on 5G vendors by government would have practical implications,” he said.