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Huawei

At the New Zealand Herald Juha Saarinen writes about the HCSEC report in The real reason Huawei shouldn’t be in 5G networks:

“The report from oversight board for Britain’s Huawei Cyber Security Evaluation Centre (HCSEC) makes it clear that clever, secret backdoors in the Chinese company’s equipment is the least of anyone’s worries.

“Instead, it’s old, unsafe and bug-infested software, bad coding practices, and little or no effort by Huawei to sort out some seriously deficient processes and practices.”

Overnight, Huawei’s status went from clever enough spy on networks undetected to bungling clowns.

The report is damning. It’s not about a few weak points here and there. Bad code run through Huawei’s software like the word Blackpool in a stick of seaside rock.

The UK has known this for seven years.

Bad software is everywhere

On one level it’s not a surprise. Poorly-written software is common. It runs the world.

Some of the best-known software names have or had dodgy code including Microsoft and IBM. Enterprise software often holds together with digital chewing gum and paper clips.

Shoddy software lies behind most computer security problems. Attackers find and exploit holes in poor code.

Critical infrastructure

That’s the problem with Huawei. Its network products are part of critical infrastructure. Criminal or hostile-state-controlled coders could find their way into those networks.

Huawei network kit has always looked advanced compared with rival brands.

The NATO Cooperative Cyber Defence Centre of Excellence underlines this:

“It is currently the only company that can produce ‘at scale and cost‘ all the elements of a 5G network, with its closest competitors Nokia and Ericsson not yet able to offer a viable alternative.”

Now it looks like Huawei cut too many corners to get out in front.
The HCSEC report is a wake up call.

Hopefully everyone watching is getting their own house in order. Experience suggests otherwise.

Fixing the mess

In theory, Huawei can fix this mess. It has acknowledge the report and says it will spend $2 billion in a programme to fix the problems.

The UK’s National Cyber Security Centre isn’t confident that will happen. It also fears any fixes that Huawei makes may not make their way into products used in networks.

Huawei has had seven years to fix problems. It’s done nothing.

Last year the National Cyber Security Centre warned the company. According to the report, Huawei made “no material progress” on identified problems.

The HCSEC oversight board say it wants to see “sustained evidence” of better software engineering and cyber security “quality” before it gives Huawei a tick.

HCSEC report not about spies

None of the flaws found in Huawei’s offering is to do with Chinese state intelligence.

That was the reason for setting up HCSEC in the first place. It’s why Huawei faces more scrutiny than other equipment suppliers.

That poses an interesting thought: How would Huawei’s rivals look if they were subject to similar investigation? Until then, there’s no logical reason to assume they are any better.

Spark New Zealand managing director Simon Moutter is retiring. From 30 June customer director Jolie Hodson will take over.

Moutter remade, rebranded and renamed Telecom New Zealand.

He inherited a Telecom NZ that was not of his making. Moutter was the company’s chief operating office between 2003 and 2008, then spent four years as Auckland International Airport. He returned to Telecom as managing director in 2013.

During his absence, the government reformed the telecommunications industry. This triggered a set of moves that saw Chorus demerge from Telecom to win UFB fibre contracts.

From vertical integration to retail telco

The Telecom Moutter left was a vertically integrated incumbent. The Telecom he rejoined was a retail telco forced to a level playing field with 90-odd rivals.

His first challenge was to make sure the business survived the changes. His second challenge was to put it back on the path to thriving. Moutter achieved both these goals with distinction. Today’s Spark is a vibrant, competitive telco.

It remains New Zealand’s leading telco by size. Spark also leads its rivals on innovation. At the time Moutter joined Spark was number one in broadband connections. It still is, although its market share has dropped a little.

Mobile success

Back then it was number two in mobile behind. It has since caught up. You could even argue it is now the market leader. It definitely has a technical edge. Spark is leading the way to 5G mobile networks.

Moutter was in charge when the business changed its name. The move told the world it was no longer a telecommunications company. Since then it has moved into the media sector. It has a sizeable streaming TV service and has made significant investments in streaming sports media.

We don’t hear much about it, but Simon Moutter has done much to make Spark a more equitable workplace. Spark won the Rainbow tick. Moutter has also spoken out against race or gender discrimination. He has pushed Spark into the 21st century.

There’s lots to admire.

Jolie Hodson
Spark customer director Jolie Hodson takes over as Chief Executive in July.

It appears that Moutter planned his resignation and handover to Hodson some time ago. Yet the timing is a problem. Moutter leaves Spark while huge and risky projects remain unresolved.

This unfinished business may explain why investors pushed the company’s share price down 3.5 percent immediately on hearing the news. At the time of writing the share price has fallen further and ahead of the market. It is down a total of 4.5 percent since the announcement.

Spark faces three challenges

First, the Rugby World Cup. There are stories that people inside Spark are becoming ever more nervous about this project.

Even if everyone involved with fibre network connections works long hours, there still isn’t enough time between now and the RWC kick off to install fibre to all the customers who want it. This problem could blow up as the event gets closer.

Spark Sport’s app fell over last weekend. The company emphasises the software is still in beta and failures are expected. Even so, the wheels fell off. That’s ominous.

My contacts tell me there is widespread pessimism about the apps’ ability to deliver inside Spark.

Spark prestige

It’s not just about money. Spark Sport and the Rugby World Cup are high profile, prestige projects. If Spark succeeds it wins both money and kudos. If it fails, the company’s reputation is at stake.

Spark’s second challenge is 5G. Moutter set a target of getting a 5G network up and running in time for the America’s Cup yacht races. They start next year.

Delivering on that narrow promise isn’t hard. Spark can borrow necessary spectrum in a small area around Auckland’s harbour. Installing half a dozen 5G towers is no big deal.

On paper there is the unresolved matter of Huawei building the 5G network. No matter, Spark has other options.

A more pressing issue is an Auckland Harbour-only 5G network might not satisfy customers elsewhere.

Rival mobile companies are not yet in a position to invest in 5G. Getting there first is important. It would cement Spark as the mobile leader without question. A prolonged delay on a wider roll-out could see customers and investors lose confidence.

Agile

Spark’s third challenge flies under the radar. Moutter lead Spark in a move to Agile working.

While all the official noises from inside the company say it has been a success, that’s not the message that’s circulating elsewhere in the industry with Spark employees keen to find employment elsewhere. There is still time for this to go wrong.

It’s normal for a leader to leave a company without drawing a line under big items, but Moutter’s personal brand is associated with all three of these. There may be nothing to it, but investors and analysts are not convinced. Moutter and Hodson have three months to show otherwise.

I write about Huawei New Zealand’s long-term role in the nation’s mobile sector for the New Zealand Herald.

Huawei has played a central role in New Zealand’s telecommunications infrastructure for a decade. The company’s New Zealand deputy managing director, Andrew Bowater, says it started working with 2degrees four years before the telco’s network was switched on in 2009.

The 2degrees partnership played a crucial role when in 2013, Telecom, now Spark, chose Huawei’s hardware to power its 4G mobile network. Bowater says; “We wouldn’t have won that without 2degrees, we wouldn’t be here today without them.”

That relationship cuts both ways. Huawei provided 2degrees with the money needed to build its network with a vendor finance arrangement. Bowater says the two companies passed an important milestone in 2013 when a local bank bought the debt off Huawei.

Huawei’s relationship with Spark went deep. The two worked together to break new ground, they were the first to use 700 MHz spectrum for a 4G mobile network. New Zealand got that ahead of the world. Likewise, they were early getting 4.5G technology to market.


Read the full story in the New Zealand Herald.