Canada bans China’s Huawei, ZTE from 5G networks

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Companies that already have Huawei or ZTE devices installed must remove them by the end of 2027

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Prime Minister Justin Trudeau’s government joined Canada’s closest intelligence allies in banning Huawei Technologies Co. from fifth-generation wireless networks.

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The Chinese state-backed telecom company poses a threat to Canada’s national security, Industry Minister Francois-Philippe Champagne said on Thursday, confirming an earlier report by Bloomberg News. Devices by ZTE Corp. are also forbidden.

Firms that already have Huawei or ZTE devices installed must remove them by the end of 2027, Champagne’s department said in a statement. Trudeau’s government had delayed the decision for more than three years because relations between Canada and China were deteriorating and a ban would almost certainly stoke tensions.

The long-awaited announcement is welcomed by President Joe Biden’s administration, which has been trying to steer countries away from Huawei. American officials claim that his equipment could allow the Chinese government to disrupt 5G networks. Since 2019, the US has imposed perhaps the strongest sanctions it has ever imposed on any single company.

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Relations between the two nations deteriorated dramatically after Canada arrested Meng Wanzhou, Huawei’s chief financial officer, on a US extradition request in December 2018. China arrested two Canadians, former diplomat Michael Spavor and entrepreneur Michael Kovrig, within days of Meng’s arrest.

The high-stakes standoff was resolved last September after the US struck a deferred prosecution deal with Meng, allowing her to return to China and bringing the two Canadians back home.

But the feud has left hard feelings. Thursday’s announcement comes just three days after lawmakers voted to revive a special committee to study the country’s ties with China. On Wednesday, the Canadian government announced that China had lifted restrictions on canola imports.

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However, the move shouldn’t pose major challenges for companies like BCE Inc. and Telus Corp. that have used Huawei devices. Fearing an eventual ban, the two companies have already begun banning the state-sponsored Chinese firm from their 5G rollout.

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Huawei has long played a key role in Canadian wireless networks. In 2008, it won its first major North American project from BCE and Telus – a crucial contract that helped cement the Chinese supplier’s reputation as a global player, competitive on quality. The deal paved the way for the company to become a key supplier to Canada’s largest telecommunications companies over the next decade.

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Leading up to the decision, Canada’s military leadership argued the company posed too great a potential security risk to allow on 5G networks. However, the country’s human and signals intelligence agencies were reportedly at odds over how best to deal with Huawei.

Canada’s largest wireless carrier, Rogers Communications Inc., has partnered with Huawei competitor Telefonaktiebolaget LM Ericsson for 5G. The Toronto-based company’s vice chairman argued in 2019 that the Chinese giant posed too big a security risk to be included in future network equations.

5G technology could be 100 times faster than existing top-of-the-line networks, with data speeds of up to 10 gigabits per second. That would vastly improve consumers’ ability to stream high-definition video and also help build the so-called “Internet of Things,” which can connect everything from home appliances to traffic lights.

In July 2021, Canada’s telecoms companies pledged to pay $8.9 billion to buy licenses for 5G ether in a record-breaking government auction. Rogers, which is trying to buy smaller competitor Shaw Communications Inc., led the way with a $3.3 billion spectrum purchase.

Bloomberg.com

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