Vodafone warns investment 'uncertainty' after Huawei 5G ban

Vodafone Australia has criticised the government’s decision to ban Huawei from local 5G networks, arguing the decision could change the economics of planned builds.

Chief strategy officer Dan Lloyd said that Vodafone “have always said that national security is paramount.”

"We always have and always will meet our obligations under Australian law," he said.

"However, major decisions of this nature need to be made with rigour, accountability and careful consideration of the economic, productivity and social implications for the country.

"This decision, which has been dropped on the eve of the 5G auction, creates uncertainty for carriers' investment plans.

"This decision is a significant change which fundamentally undermines Australia’s 5G future, and we will consider what it means for our business."

Vodafone is known to have trialled 5G equipment from both Huawei and Ericsson. The telco also spoke about 5G last week at Huawei’s Australian partner summit.

Vodafone and Huawei have plenty of history; a 2011 base station rip-and-replace deal was considered to be Huawei’s breakthrough into the Australian market.

Telstra, Vodafone and TPG are likely to be the three main players in an upcoming auction of prime 5G spectrum run by the government.

Prices paid for similar spectrum at the end of last year suggested the government could have been in line for a major boon from this year’s auction, which commences in late November.

However, for telcos whose 5G plans were aligned with the use of Chinese equipment, this could act as a major dampener on bid prices as the economics of planned builds have to be reworked.

Optus sees 'certainty'

Unlike Vodafone, Optus’ regulatory and public affairs vice president Andrew Sheridan suggested the government’s advice provided “certainty ... to the industry.”

“Optus has a mix of vendors in its mobile network and we remain well positioned to lead in the delivery of 5G services,” Sheridan said in a statement.

The telco is known to use a significant amount of Nokia equipment in its 4G network. It has also tested 5G gear from Nokia and Huawei.

“Optus shares the government’s objectives of ensuring the security of Australia’s information, communications and critical infrastructure,” Sheridan said.

“Our track record demonstrates collaboration with government, departmental agencies and vendors to develop appropriate controls and safeguards to ensure that our network and services remain secure.

“Optus will comply with the guidance.”

Meanwhile, a Telstra spokesperson told iTnews that it had seen the announcement "and will comply with the government’s direction."

As a majority Ericsson shop, Telstra is likely to be largely unaffected.