China's Huawei barred from major Australian broadband deal

The USD 38 billion project aims to connect almost every Australian home to a very high speed Internet connection.

Melbourne: In a setback to Chinese telecom giant Huawei, Australia has blocked it from tendering for a prestigious USD 38 billion nation-wide broadband contract due to cyber attacks originating from China.

Defending the move, Prime Minister Julia Gillard today said the decision to not allow Huawei to take part in tenders for the National Broadband Network (NBN) project was "prudent".

A spokesman for Attorney-General Nicola Roxon said the NBN was the "backbone of Australia's information infrastructure" and as such the government had a responsibility "to do our utmost to protect its integrity and that of the information carried on it".

The USD 38 billion project aims to connect almost every Australian home to a very high speed Internet connection.

The Australian Financial Review said in a report that Huawei was seeking to secure a supply contract worth up to USD 1.04 billion with NBN, but has been blocked by the Attorney- General's department based on advice from Australian Security Intelligence Organisation (ASIO).

Gillard told reporters in Seoul, where she is attending nuclear security talks with other world leaders, that the NBN is a crucial national infrastructure project.

"You would expect, as a government, we would make all of the prudent decisions to make sure that that infrastructure project does what we want it to do, and we've taken one of those decisions," she said, when asked about the Huawei decision.

One of the reasons for the ban on Huawei could be that the company's founder Ren Zhengfei was in the Chinese People's Liberation Army until 1984.

Huawei, considered to be the world's No. 2 telecommunications equipment maker, says while the decision is a setback, it will continue to work with all of Australia's major telecommunications operators and remains hopeful of playing a role in the NBN, Australia's AAP news agency reported.

Huawei corporate affairs director Jeremy Mitchell said despite the prime minister's comments he believed it was a temporary hurdle for the company.

"I think the best way to do this is to work together," Mitchell told ABC Television after Gillard's comments.

The ban on Huawei underlines global concern about Beijing's cyber warfare efforts after a series of hacking attempts on Western companies were traced to China.