NCC imposes ban on Huawei core network parts, security threat cited

1 Jul 2011

According to the Taipei Times, Taiwanese telecoms regulator the National Communications Commission (NCC) has imposed a ban on the country’s telcos using core network equipment supplied by Chinese equipment manufacturer Huawei Technologies. The watchdog has reportedly cited concerns over national security as the reason behind the ruling. NCC spokesperson Chen Jeng-chang indicated that the Executive Yuan (executive branch of the government) has requested that the regulator handle the matter in a ‘lawful and cautious manner’. Several notable Taiwanese telcos – including Asia Pacific Telecom (APT), Vibo, Taiwan Mobile and Far EasTone – are all believed to have purchased equipment from Huawei this year. The Taipei Times reports that some of the products are being held by Taiwanese customs until the dispute can be resolved.

Chen confirmed that any telcos hoping to use core network equipment from the Chinese vendor must secure approval from both the NCC and the country’s Investigation Bureau. Telecoms operators have reportedly been directed to the Ministry of Economic Affairs website, which now contains a list of Chinese-made telecoms products which are banned from being imported. Further, in a move that is sure to inflame tensions between the two nations, Chen suggested that the companies should consider alternative suppliers that offer similar technologies. According to TeleGeography’s GlobalComms Database, in June 2010 Taiwan and the mainland signed the landmark Economic Cooperation Framework Agreement (ECFA), a pact that the Taiwanese authorities hope will eventually lead to a free trade arrangement that will increase cross-Straits economic ties and reduce market access barriers. The signing of the ECFA has been described by some political analysts as ‘the most significant agreement in 60 years of separation’.

Huawei, which is headquartered in Shenzhen, Guangdong Province, is the world’s second-largest supplier of mobile telecommunications equipment, behind Ericsson. In the past, the United States and India have both blocked deals involving Huawei products for similar reasons. In May 2011 Huawei requested permission from the Taiwanese government to set up a new subsidiary in Taiwan; the move made Huawei the first mainland telecoms equipment manufacturer to apply to establish a subsidiary in Taiwan. Huawei hoped to set up a research and development centre in Taiwan to complement foreign R&D bases in the US, Russia and Sweden. The establishment of a Taiwanese subsidiary was expected to help the company increase cooperation with Taiwanese manufacturers and shorten its supply period, but the plan seems unlikely to succeed in light of recent developments.