Exec: Huawei deal too risky

Business, Normal

The National, Thursday July 11th, 2013

 A SENIOR official involved in the telecommunications industry in Papua New Guinea has raised national security concerns over moves to have the China-based Huawei Technologies Co Ltd’s set up operations in the country.

Requesting anonymity for fears of losing his job, the official said recent concerns raised by the PNG opposition and overseas-based media on past Huawei Technologies’ deals with Iran and the Chinese military should ring alarm bells along the corridors of Waigani and at the Morauta Haus (where the prime minister’s office and the National Executive Council are located).

PNG media reports this week claimed Telikom PNG and Huawei Technologies had inked a deal for the deployment of a National Broadband Network (NBN), covering 800,000 premises across the country.

“Prime Minister Peter O’Neill, State Enterprises Minister Ben Micah and members of the National Executive Council must take the concerns raised by the Opposition seriously.

“I also appeal to them to revisit the concerns raised by a group of US Republican lawmakers on how Huawei Technologies had gone about penning deals with US firms and organisations to supply equipment to the US military and law enforcement agencies,” the official said.

“I have discussed this issue with my fellow colleagues in the industry and we are concerned that Huawei’s past record could create substantial risk for local companies and suppliers and possibly undermine PNG national security.”

Citing overseas media reports that Huawei Technologies Co Ltd president Ren Zhengfei had close ties with the Chinese military and Communist Party, and an ex-People’s Liberation Army member, the officer said this bordered on PNG national security and every care must be taken in executing any business arrangements and deals.

According to Wikipedia, Ren was listed by Forbes magazine in 2005 as the 190th richest person in China, with private assets of about US$450 million (K995 million) in 2010.

He founded Huawei Technologies Co Ltd in 1988, and was involved in the development, production and sales of telecommunication equipment. 

With annual revenue of US$34 billion (K75 billion) with 10% going into research and  development, the company employs more than 144,000 workers.

Speaking to reporters this week, State Enterprises and Public Investments Minister Ben Micah said while Huawei did have a concerning history, especially with the Americans and, recently India and Great Britain, “we generally welcome foreign investment”.

“I do not want to drag PNG into issues of national security between the Chinese and the Americans.

“Our genuine efforts to develop our country does not relate to the needs of their countries,” Micah said.

On the NBN contract, the minister said there was a need to improve and modernise PNG’s telecommunication asset.

“Telikom needs to completely upgrade its systems, together with other telecommunication infrastructures that were established between the 1960s and eighties,” Micah said.

“The Government wants to improve the value of Telikom and modernise it so that Telikom can compete with Digicel and bemobile, bring all call rates down through wider coverage and enable access to a much bigger population.”

Fighting the accusations by the US senators, Huawei denied any connection to the Chinese military or government and said it was “disappointed to learn that old mischaracterisations about the company still linger”.

“The truth is Huawei is an employee-owned private company … (that) complies with all the laws, regulations and related trade compliance regulations established by the United Nations and all the countries where we operate including the US,” the company said in a statement.

“This also applies to Iran, where our business operation is similar to other western vendors in the market.”