NZ's Pacific Fibre jabs at Huawei

Rushworth - opportunity to take a jab

Over the weekend, it was revealed China's Huawei has been blocked from bidding for tenders associated with the Australian government's $A32 billion National Broadband Network (NBN) - a domestic project.

Today, the Chinese telecommunications giant faces fresh controversy following reports the Australian government is also investigating a proposed $A300 Perth-Singapore submarine fibre optic cable, proposed by Huawei in January.

On this side of the Tasman, Pacific Fibre chief executive Mark Rushworth has waded into the debate. 

Mr Rushworth said he was confident his company's proposed $US400 million trans-Pacific cable will be free of similar controversy. The cable will be laid by New Jersy-based TE Subcom, a vendor pushed by Secretary of State Hillary Clinton during her 2010 NZ visit, during which she met briefly with the Pacific Fibre boss.

"Having a US vendor on board reduces the risk of Pacific Fibre facing the same concerns from regulatory authorities in relation to security breaches on our cable system," Mr Rushworth said this afternoon.

TE Subcom CEO David Coughlan, Pacific Fibre boss Mark Rushworth and US Ambassador to Australia Jeff Bleich at a signing ceremony for Pacific Fibre's cable contract with the New Jersey-based TE Subcom. 

"Last month we announced the completion of our Californian and Australian landings desktop study and Californian permitting in conjunction with TE Subcom."

Initial approvals have been obtained from Californian permitting authorities, Mr Ruthworth said.

He told told NBR this afternoon, "It's fantastic to have TE Subcom onboard building Pacific Fibre. Their track record gives us confidence around US and Australian permitting."

Clearly with his eye on the main chance, Mr Rushwoth added, tartly, "Where this leaves the proposed Huawei-built transtasman cable is another question."

Huawei Marine and a second Chinese company, Axin, have proposed an Auckland-Sydney submarine cable, with state-owned Kordia vying for the right to manage it.

(Huawei Marine is a joint venture between UK-based Global Marine Systems, which claims to have installed more undersea fibre optic cables than any other operator, and Huawei.)

The comment is a change in tone from when Axin and Huawei Marine first announced their cable - at which time he told he welcomed the competition. Possibly he still does - but apparently that doesn't mean he's above making the competition a little harder.

Huawei's Australian and New Zealand operations have vigorously denied there is any kind of security risk associated with the company winning national or international infrastructure projects, pointing ot the company's track record in the global market.
 
Yesterday, Huawei's NZ corporate and public affairs director, Mark Champion, told NBR he was confident Huawei's participation in the domestic Ultrafast Broadband (UFB) project would not be impacted.
 
From comments made by ICT minister Amy Adams yesterday - the minister said NZ government takes security seriously, but would not comment on individual vendors - it seems a fair bet Huawei's incumbent business is safe.

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From a Stuff Article

(Axin Chair Robert) "Lee said media reports in September that Axin represented a firm that was majority owned by China Telecom were incorrect. The financial backers of the proposed cable were himself and other individuals investors living in New Zealand and Hong Kong."

http://www.stuff.co.nz/business/6268369/Trans-Tasman-cable-agreement-made

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Mark Rushworth what planet are you on.

You state that your company mitigates the rsik of Chinese security issues by the fact that your partner is USA based.. Based on historical security breaches and other blatant US espionage activities around teh globe, I would be more concerned about the USA partner than Huawei.

Your response suggests that your company is struggling in a free market where Huawei won the NZ broadband contact - which contradicts the normal democratic argument from the free world.

Probably best to stay out of it Mr Rushworth

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Doctor you have given the correct prognosis in regard to Mark Rushworth and the Xenophobic Kiwi culture.

What is wrong with this country - China are a world power have the strongest economy - want to do business with NZ as opposed to

USA - economy dying, continually interfere in other countries economies and politics, invade peacefull countries whenever oil supplies or minerals are at risk ( as though they own the worlds resources situated in independent countries ), spy on everything and anything etc etc etc

The CIA are probably already interferring in NZ and Australia on the issues in this article - tehy have probably created the issue.

For Gods sake embrace China and move on in life - we can still deal with the USA even though they are on a downward spiral to becoming a minor economic power.

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The CIA is dragging USA down to its destruction. It's trying to prevent an inevitable change. It should try to change it's game plan, otherwise it should face extinction. I believe there are so many things that USA can leverage on, but it has to get rid of all of the bad lots such as this agency.

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Good point Kiwibrew. Pity Chairman Lee had to correct us all. Axin seemed so much more credible when China Telecom was behind it.

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I wouldn't worry the way things are progressing neither cable will be built! Marks desperate effort to stay in the news are laughable.

Like the Doctor I am just as concerned about the US and France with tapping us

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Hopefully this obvious outcome of doing business with China will result in the New Zealand government supporting a New Zealand based proposal, Pacific Fibre, which meets the security expectations of our allies and keeps Kiwis safe.

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Amazing that USA vs China poltics can have such impact on Australian domestic development!!

If we follow the same logic NBN should ban all chinese made electronic components & equipment....wouldn't that be an interesting challenge to all potential bidders?

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Amazing that anytime facts about China's corrupt trade practices are reported in free countries that an army of Sino-trolls appear in blog posts trying to misdirect attention toward the USA.

And the only way you people would get a Crafar farm in Australia is with an Aussie burying you under it.

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China bad, West good.....Yeah right!
Such a bitter & depressing experience it was having to sell the precious and bankrupt Crafar farm to the rich Commies...

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One get's the feeling it won't matter who gets these contracts, the result will be the same - one way or another we will all be spied on.

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We shouldn't give any vendor a pass when it comes to building critical infrastucture. Either they submit all their equipment and source code for vetting by independent analysts or they get dropped from the tender. Us, Chinese, I don't care who builds it. Show us the source or get lost.

BTW, I made this very same warning in July 2010. I get tired of our government acting toward technology like a bunch of rubes on their first outing in the big city: "Of course we subjected Huawei to rigorous examination around security, They showed us an excellent Powerpoint presentation proving how good they are before they shouted us dinner and hookers."

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This is such a pathetic attempt to keep Pacific fibre in the news.
Is any investor realy going to back a CEO like Rushworth who throws himself into an issue he understands little about?
There are multiple cables landing in US and other countries that have Chinese equipment already. The worlds biggest maker of subsea telecoms gear is French - obviously we trust them....

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If only the Chinese bankers had actually thought Pacific Fibre was worth investing in. Then we would have enjoyed a less xenophobic approach from Rushworth and we would have got the project built. Oh well.

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So what we have is a bunch of potential customers over here - mainly Government of Australia and agencies - who have stated they want non-Chinese solutions rightly or wrongly (I think the latter). All these new guys Pacific Fibre have said is that they can provide a solution to these parties. I put it back on NBNCo and the Govt of Australia to review their Chinese policy rather than beat up the new guys who happen to offer an alternative.

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Why can't we sell 49% of the Crafar farms (or any other land) to foreign companies, rather than 100%?

People rant about xenophobia if we're not selling things outright, but yet we are not able to buy land outright in many of these same countries.

I own a place in Asia (an apartment) but I am not allowed to own land unless it is a 49% share in a property owned 51% by a local concern.

Are we New Zealanders just too thick to differentiate between selling 100% to foreigners versus following their example? (Hence our need to brand all arguments against 100% sales as xenophobic.)

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Axin is very pleased with the design and build contract it has with Huawei Marine Networks. It will provide a massive boost to NZ's connectivity.

When we were considering supplier choice, we were well aware of the perceptions within some quarters of concern about Chinese technology. A large effort went into ensuring that we could show potential customers and the two local governments why this concern is ill-founded. This was important so that we could get our initial permits and, of course, so that our marketing position would be strong.

There are several layers to providing comfort:

1 Other cautious owners are happy to us HMN technology after their investigations were undertaken. People know that Huawei provide a huge amount of telco equipment globally. A great example is the new Hibernia Atlantic http://www.hiberniaatlantic.com cable network is provided by HMN. It is designed to be carry highly sensitive data linking the financial communities in north america and europe. The markets and carriers are all satisfied with it.

2 HMN will not even be connected to the cable or its management systems once it is in operation. Unexpected traffic to China would be obvious to us and the two local governments. We have put in place a design with special precautions to give every customer even more comfort than usual just to remove all concerns.

3 As Huawei have already commented, it would be commercial suicide for them to undertake surveillance.

4 It may not be well-known yet but Axin Limited, the cable-owning company, is expected to be mainly New Zealand and Australian owned. We want the management of the cable and equipment to be carried out under contract by Kordia Networks. This contract can not be finalised and considered by Kordia until more detailed design work makes the scope clearer. Like other submarine cables, we expect our shareholders' agreement with the large telcos and other shareholders will limit every party's access to the physical equipment and traffic.

We know that the Huawei deal will provide New Zealand with a cable that is as technically advanced as any in the world, at a price we can afford and much earlier than any other option. It will complement the existing Southern Cross cable perfectly.

Robin Lee
Chairman
Axin Group

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