Jan 18, 2019 01:19 PM

Canada’s Huawei 5G Decision Months Away, Sources Say

Photo: VCG
Photo: VCG

(Bloomberg) — Canada is still conducting its security review of 5G telecommunications technology, and a decision on whether to restrict Huawei is still at least months away, people familiar with the plans say.

Canada’s security agencies continue to study the issue, including what potential security vulnerabilities exist, the people said, speaking on condition of anonymity because they weren’t authorized to discuss the issue publicly. That review could lead to a particular company, such as Huawei Technologies Co. Ltd., being restricted or banned. They’re divided on how soon a decision will come. One said the decision is expected before the Canadian election in October, while others said it wasn’t imminent.

The 5G security review is drawing heightened interest amid a rising diplomatic feud sparked by Canada’s arrest — at the request of the U.S. — of Huawei’s Chief Financial Officer Meng Wanzhou on Dec. 1. China has since seized two Canadians, including a former diplomat, and sentenced a third to death. Other so-called Five Eyes countries including the U.S. and Australia have placed restrictions on Huawei’s operations given its close ties to the Chinese government, moves that place pressure on Canada to make a decision.

Canada has two ongoing review processes related to rolling out 5G technology: one for allocating spectrum, and another on national security. The government isn’t accelerating or slowing either track amid the feud with China, the people said. The two reviews won’t necessarily be completed, or ruled on by Justin Trudeau’s government, at the same time, the people said.

China’s ambassador to Canada, Lu Shaye, said Thursday that Canada would face consequences if it prevents Canadian telecom firms from using Huawei equipment.

“If the Canadian government does ban Huawei from participating in the 5G network, then as for what kind of repercussions there will be, I am not sure, but I believe there will be repercussions,’’ he told reporters in Ottawa.

Huawei is racing to partner with Canadian telcos to develop 5G technology, the fifth-generation mobile network that could be 100 times faster than current technology and spur breakthrough advances in such things as autonomous vehicles. The Chinese firm also supplies some Canadian operators with older generation equipment. Huawei is already the third-biggest supplier to Vancouver-based Telus Corp., one of Canada’s top three network carriers, according to supply chain data compiled by Bloomberg. Huawei has also worked with BCE Inc.’s Bell Canada.

China detained two Canadians — Michael Kovrig, who is on leave from a job in Canada’s foreign service, and Michael Spavor — on Dec. 10. A third man, Robert Lloyd Schellenberg, saw his sentence in a drug case raised to a death sentence, rather than a prison term. Canada opposes the death penalty on principle, Canadian Foreign Minister Chrystia Freeland said Thursday. She’s pushing for the release of Kovrig and Spavor, and for clemency for Schellenberg.

Kovrig’s case is considered particularly galling for the Canadian government, the people said. While he’s not a diplomat currently, he’s being questioned about his activities while working for the Canadian government, the people said.

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