Huawei and ZTE whose products are still openly being sold by Telstra, Optus and Vodafone TPG are facing a major new problem after a new US Federal Government crackdown barred Companies that use and sell their equipment from bidding for government contracts.
If this was applied in Australia Telstra who sell Huawei 4G & 5G wireless hubs and Optus and Vodafone TPG Huawei routers and fibre network connection gear some which is supported by China Telecom, would be banned from any Federal or State Government contracts.
The procurement ban, based on defence legislation signed in 2018, expands on regulations implemented a year ago that banned government agencies from buying equipment from or renewing contracts with five Chinese companies.
The latest move is a major blow for Huawei whose smartphones are still being sold by JB Hi Fi alongside other high risk Chinese brands such as Oppo and Xiaomi.
Besides Huawei, the targets are ZTE, camera makers Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology, and radio equipment manufacturer Hytera Communications all Companies whose products are sold and marketed in Australia.
Hikvision whose products are sold by the likes of Security Wholesalers in Australia, said the measures had no real effect, as the company does no direct business with the U.S. government.
But the rules put into effect last night will reverberate more broadly, as all five companies have made at least some headway into the US private sector claim analysts.
U.S. tech security company Forescout Technologies claim that around 67,000 pieces of Huawei telecommunications gear were being used by private-sector businesses in the U.S. as of last month, with the manufacturing and health care sectors each using more than 14,000, according to a study by
Forescout found 64,000 Hikvision surveillance cameras, 3,000 Dahua devices and 4,000 pieces of ZTE equipment in use across a wide range of fields, including at educational and financial institutions.
All of these products including Huawei and ZTE communication gear have been described as a “Major security risk”.
The Trump administration is set to decide whether to tighten the crackdown further today when a limited reprieve from the ban on exports to the company expires.
The Commerce Department has allowed American companies to continue doing business with Huawei if necessary, to maintain internet or phone service, while encouraging them to replace the problematic equipment.
About 25% of rural telecom companies use Huawei or ZTE gear, by one private-sector estimate.
The department had repeatedly extended the initial 90-day grace period but said the most recent extension in May would be the last, suggesting that it could end as early as this month.
How this will affect Google’s Android mobile operating system and apps that run on it is a key question for Huawei. Google wrote in February that it has continued to work with the Chinese company to provide updates for software on devices sold before May 2019 and “will continue to do so as long as it is permitted.”