Australia in new rebuff to Chinese telcos

June 26th, 2017 by · Leave a Comment

This article was authored by Lachlan Colquhoun, and was originally posted on

China is Australia’s major business partner and the value of its currency rises and falls almost in line with the price of the iron ore and coal which it sells.

The Port of Darwin is owned by Chinese business interests, and Chinese investors are major players in almost every sector of Australian business life from residential and commercial property to mining.

One area that the relationship does not penetrate is, inexplicably, telecommunications and IT.

While neighboring New Zealand has been a happy hunting ground for Huawei, where the company has built networks and is pumping in around NZ$400 million ($291.4 million) into the tech sector, there has been no such welcome in Australia.

In fact, Huawei was controversially excluded for tendering to build Australia’s National Broadband Network, a ban which has been confirmed on several occasions due to “security concerns.”

Now, Australia’s security concerns about China have come to the fore again. The Australian government is moving classified information from a private data center in Sydney after a Chinese consortium purchased a majority stake in the provider.

Global Switch was a UK company but is now 49% Chinese owned after a $3 billion deal last year.

Many members of the Australian security community believe the government is right in moving the data, but bizarrely it won’t happen immediately.

It will continue to be housed in the Global Switch center until the current contract runs out in 2020, after which it will be rehoused in a new data center owned by the government. This will come at a cost of A$200 million ($151.5 million).

So if the Chinese interests which own a major stake in Global Switch were to have their way with the Australian government data, they have several years in which to do so.

You would think that, by this time, any damage in terms of data breaches would have been done but the government is undeterred, even if the solution they have come up with seems absurd. They will be spending A$200 million and in the meantime the data will stay with a provider in which the government clearly has no trust.

Behind all this of course is the fear of cyber sabotage, as being played out in the US furor over Russian hacking involvement in last year’s election.

In Australia, authorities are convinced that a foreign power installed malicious software on the Australian Bureau of Meteorology computer systems last year to steal sensitive documents and compromise other networks. Suspicion has been heaped on several nations, China among them.

When it comes to China, the telecoms industry is now the main victim of the Australian government’s schizophrenic thinking.

Anything regarding economics and trade seems to be ok, but as soon as the relationship moves into the defense sphere and geopolitics, Australia reverts to type and treats China as a potential enemy.

The contradiction in Australia’s position could receive its ultimate test in the event of escalating conflict in the South China Sea. Who would Australia support, its biggest trading partner and the engine of its economy, or its “old ally” it has – unquestioningly – followed into every conflict since World War 2?

In the meantime, this contradiction is being played out in the telecoms and IT space where the policy continues to be inconsistent: its perfectly fine to sell raw materials to China and welcome the vast majority of their investments, not to mention students and tourists, but let’s not talk about telecoms or IT.

Huawei, however, has recently had a rare win in Australia which highlights the absurdity of the situation even more. Banned from bidding to build the NBN, Huawei has had its phones approved for use by Defence officials and top diplomats.

This, in fact, is already happening, and at least 40 Huawei phones have already be issued to Defence and Diplomatic staff so far this year.

Who needs access to a data center, when you can get your – alleged – targets to use your phones?

If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!

Categories: Government Regulations · Other Posts · Security · Telecom Equipment

Discuss this Post

Leave a Comment

You may Log In to post a comment, or fill in the form to post anonymously.

  • Ramblings’ Jobs

    Post a Job - Just $99/30days
  • Event Calendar