China’s Huawei and ZTE have been banned from providing 5G technology with the Australian government citing national security concerns.
“This is a extremely disappointing result for consumers,” Huawei posted on Twitter.
Huawei is the world’s biggest producer of telecoms equipment. It also ranks second in global smartphone sales, behind Samsung and ahead of Apple.
In July, a UK security committee warned that it had “only limited assurance” that Huawei’s telecoms kit posed no threat to national security. It is one of BT’s biggest suppliers.
The UK’s cyber-defence watchdog – the National Cyber Security Centre – has also warned that the use of ZTE’s equipment and services could pose a national security risk.
The Australian government said national security regulations that were typically applied to telecoms firms would be extended to equipment suppliers. Companies that were “likely to be subject to extrajudicial directions from a foreign government” could present a security risk, it said.
The US has previously banned Huawei from bidding for government contracts because of fears over espionage. ZTE has also had its activity restricted in the country.
Under Chinese law, companies must co-operate with the intelligence services. Analysts therefore warn that equipment produced by firms such as Huawei and ZTE could be compromised.
China’s foreign ministry said Australia should not “use various excuses to artificially erect barriers”.