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A man talks on his phone beside a Huawei's billboard featuring 5G technology in Beijing, China, on Sept. 26, 2018.

CHINA STRINGER NETWORK/Reuters

New Zealand is barring China’s Huawei on national-security grounds from supplying equipment for next-generation mobile networks, and in doing so has become the third member of the “Five Eyes” intelligence-sharing alliance to take action against the huge Shenzen-based telecom-gear maker.

The move by New Zealand leaves Canada and Britain as the only Five Eyes members that have not banned wireless carriers from installing Huawei Technologies Co. Ltd.’s 5G technology despite strong pressure from the United States. However, Britain recently did raise security concerns about Chinese-supplied telecommunications equipment from companies such as Huawei.

The United States, Britain, Canada, Australia and New Zealand are members of Five Eyes alliance that shares intelligence to combat espionage, terrorism and global crime.

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Back in August, Australia banned Huawei from supplying 5G equipment, citing a security threat to its infrastructure. The United States has also barred Huawei and it has been lobbying Five Eyes partners and telecommunications firms in allied countries to avoid Huawei equipment.

On Wednesday, one of New Zealand’s intelligence agencies rejected the request of telecommunications services provider Spark New Zealand Ltd. to use Huawei’s 5G equipment.

“I have informed Spark that a significant security risk was identified,” Andrew Hampton, the director-general of New Zealand’s Government Communications Security Bureau, said on Wednesday. This organization is the New Zealand equivalent of Canada’s Communications Security Establishment (CSE).

Mr. Hampton and New Zealand Intelligence Services Minister Andrew Little declined to discuss the specific security risk because of classified intelligence. However, Mr. Little explained that 5G technology poses a greater national-security risk than conventional mobile technology.

“The principal difference between 5G technology and the conventional 4G and 3G technology is that the conventional technology has an infrastructure core and then peripheral technology such as cellphone towers and the like, and they can in effect be kept separate, but you cannot do that with 5G technology," he said. “Every component of 5G technology, every component of the network is integrated and, therefore, access to one component can lead to access to the entire network.”

Under Chinese law, companies in China “must support, co-operate with and collaborate in national-intelligence work” as requested by Beijing, and security experts in the United States and Canada warn that equipment produced by firms such as Huawei could be compromised on behalf of China’s ruling party.

It’s not known what security risk New Zealand has in mind. Earlier this month, however, The Australian newspaper, citing an unidentified national-security source, reported that the Chinese government used Huawei to hack a foreign network, using the telecom-equipment maker’s access codes to do so. Which country was hacked was never identified and Huawei denied any involvement in espionage.

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5G is the next stage in cellular technology and will require a massive infrastructure build-out in countries to deliver the faster download speeds promised.

Under pressure from Washington, the Canadian government has said it is conducting a national-security review to determine whether Canada should join other Five Eyes partners in banning Huawei.

On Wednesday, Public Safety Minister Ralph Goodale’s office declined to comment on the New Zealand decision and whether Ottawa was made aware of the specific security risk that led to the ban. Nor would the minister’s office say when Ottawa would decide whether to bar Huawei from 5G networks. Instead, all questions from The Globe and Mail were referred to the CSE’s new Canadian Centre for Cyber Security.

“CSE and the Cyber Centre continue to work closely with a wide range of partners and stakeholders – domestically and internationally – and will continue to contribute to the development of cyber security best practices that can be promoted in the interests of Canada’s national and economic security. That includes New Zealand,” CSE spokesman Ryan Foreman said in a statement. “We are of course following developments on this issue. As the government anticipates the implementation of 5G infrastructure in Canada, the Cyber Centre’s expertise and experience will be important in assessing cyber threats and risks, as well as providing advice and guidance about possible mitigations."

Conservative national-security critic Pierre-Paul Hus said there is no excuse now for Canada’s indecision on whether to follow the United States, Australia and New Zealand. “It is crystal clear. We must act. We must ban Huawei,” he said.

Huawei Canada vice-president Scott Bradley told The Globe that Huawei is not a national-security threat and the company’s “highest priority is – and always has been – the security and privacy of networks that we help to equip here in Canada.”

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“Huawei Canada will continue to work collaboratively with the Canadian government, carriers and other domestic stakeholders to take whatever steps are needed to ensure and protect the integrity of Canada’s national telecommunications infrastructure, including the rollout of 5G technology,” Mr. Bradley added.

Two members of the U.S. Senate intelligence committee – ranking Democrat Mark Warner and Republican Marco Rubio – wrote to Prime Minister Justin Trudeau in October urging him to exclude Huawei from supplying Canadian telecoms with 5G technology. The senators cautioned Mr. Trudeau that allowing Huawei into Canada’s next era of wireless infrastructure could interfere with intelligence sharing among key allies and impair cross-border co-operation in telecommunications between U.S. and Canadian firms.

The Wall Street Journal reported last week that Washington has initiated a high-level outreach campaign to foreign allies, trying to persuade wireless and internet providers in these countries to avoid Huawei equipment because of national-security concerns.

In Canada, two of the country’s biggest wireless carriers – BCE and Telus – are declining to reveal whether U.S. national-security officials have asked them to avoid telecommunications equipment made by Huawei when building their 5G mobile technology networks. Rogers Communications, for its part, says it wasn’t contacted.

BCE, Telus and, to a lesser extent, Rogers all use Huawei equipment in their cellular networks, and as the Chinese company has made inroads in the Canadian market in recent years, the carriers have come to rely on it to spur more competitive pricing in an area that requires constant capital investment.

In Canada and Britain, there is testing – funded by Huawei – that analyzes the firm’s equipment for possible back doors that could allow Beijing to spy or disable systems. Last July, the British government revealed it had found technical and supply-chain issues with equipment made by Huawei that exposed Britain’s telecom networks to new security risks. In October, the British government sent a letter to telecom firms saying it was reviewing whether the country was too dependent on a single hardware provider. The Financial Times reported that Huawei was the target.

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Former directors of the Canadian Security Intelligence Service – Richard Fadden and Ward Elcock – and John Adams, the former CSE head, told The Globe in July that Ottawa should keep Huawei out of 5G in Canada.

With files from Reuters

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