Chinese vendors Huawei and ZTE have been banned from supplying equipment for 5G networks in Australia.
“We have been informed by the government that Huawei and ZTE have been banned from providing 5G technology to Australia,” Huawei Australia said in a statement to Twitter.
“This is a extremely disappointing result for consumers.
“Huawei is a world leader in 5G [that] has safely and securely delivered wireless technology in Australia for close to 15 years.”
The ban was announced jointly by the departments of Home Affairs and Communications in a statement this morning.
Though the statement did not specifically reference Chinese vendors, it said that “the government considers that the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference.”
The ban of Huawei, in particular, is likely to have a major impact on the 5G plans of some carriers, as well as the economics of their forthcoming builds.
Vodafone Australia has warned the decision will create investment uncertainty, particularly in the lead-up to the 5G spectrum auctions in November.
The government said it had “undertaken an extensive review of the national security risks to 5G networks.”
It argued that because 5G networks involved more sensitive network functions being pushed out of the core and processed at the edge, the potential attack surface of 5G networks is much greater than for previous generations of mobile networks.
Over time, the government said it expected “the distinction between the core and the edge will disappear”.
“This shift introduces new challenges for carriers trying to maintain their customers’ security, as sensitive functions move outside of the highly protected core environment,” the government said.
“This new architecture provides a way to circumvent traditional security controls by exploiting equipment in the edge of the network – exploitation which may affect overall network integrity and availability, as well as the confidentiality of customer data.
“A long history of cyber incidents shows cyber actors target Australia and Australians.
“Government has found no combination of technical security controls that sufficiently mitigate the risks.”
The government's move puts equipment vendors like Ericsson and Nokia in the box seat to score lucrative 5G deals with Australia's four mobile telcos - Telstra, Optus, Vodafone and TPG.
Nokia's Oceania head of corporate affairs Tim Marshall said in a statement that the vendor already had "strong relationships with all Australian carriers".
"We will obviously be working closely with them to help understand how [these rules] will be implemented," he said in a statement.
The move to ban Chinese vendors like Huawei from participating in 5G networks came after an extended period of discussions.
Back in June, Huawei executives refuted government claims it posed a security risk, calling the criticism "ill-informed".
Huawei has previously been banned from bidding for NBN work (though its rival ZTE was allowed in that instance).
The Australian government also recently intervened to keep Huawei out of a subsea cable construction project in the Solomon Islands.