Huawei has been operating in Australia since 2004, providing networking and wireless equipment to telecom operators. While Huawei had grand ambitions of achieving deeper penetration into Australian telecom operators, a Huawei-assisted espionage incident stopped that ambition. In 2018, the Australian Govt. prevented Huawei from participating in Australia's 5G network build-out. Since then, Huawei's business in Australia has been declining.
As of 2022, Australia had three leading mobile operators: Telstra, Optus, and TPG Telecom [Wiki1].
Telstra has the largest penetration of the three operators and uses Ericsson equipment in its 3G, 4G, and 5G mobile networks.
Optus is a subsidiary of Singapore Telecom (Singtel). Optus's 3G and 4G mobile networks used equipment from Huawei [SMH2018].
TPG Telecom came about with the merger of Vodafone Hutchison Australia (VHA) and TPG - an internet service provider that also ran a 4G mobile network. VHA used equipment from Huawei in its 2G, 3G, and 4G mobile networks, in addition to Nokia and Ericsson equipment for other parts (core) of the same network [Wiki1], [SMH2018].
- 2004: Huawei starts Australia operations [Reuters2012]
- December 2010: VHA chooses Huawei for a portion of its mobile network [SMH2018]
- June 2011: Huawei sets up board of directors for Australian subsidiary [AFR2020]
- Late 2011: Australian Govt. privately instructs Huawei to refrain from submitting an application to participate in National Broadband Network (NBN) project [Verge2012]
- March 14, 2012: Optus chooses Huawei to build 4G network in Australia [SMH2012]
- March 26, 2012: Australian Govt. publicly confirms exclusion of Huawei from NBN project on security grounds [Verge2012], [Reuters2012]
- March 31, 2012: Huawei sponsors Australian Rugby team Canberra raiders to improve its public image in Australia [AFR2012]
- Early 2012: Australian Govt. informs U.S. Govt. of China's use of Huawei equipment for espionage in Australia in Optus's network [Bloomberg2021]
- 2012: U.S. Govt. acknowledges China's use of Huawei equipment for espionage in U.S. [Bloomberg2021]
- October 31, 2013: New Australian Govt. maintains Huawei's exclusion from NBN [ZDNet2013], [AFR2015]
- June 27, 2017: China enacts "National Intelligence Law" requiring all Chinese companies and citizens to comply with security agencies on intelligence matters; the new law (implicitly) applies to Huawei, ZTE [LR2021]
- August 23, 2018: Australian Govt. bans vendors subject to extra-judicial direction from a foreign government from participating in 5G mobile network build-out; Huawei and ZTE are (implicitly) deemed to be such vendors [BBC2018]
- 2017/2018: Huawei's revenues in Australia peak at (AUS) $735M/year [AFR2020]
- August 23, 2019: Huawei confirms plans to reduce staff in Australia [Nikkei2019]
- March 3, 2020: Huawei winds down Australian board of directors [AFR2020]
- August 31, 2020: Huawei announces end to sponsorship of Canberra Raiders [Herald2020]
As per [Bloomberg2021], Chinese agents worked with technical employees of Huawei to install an unauthorized software update on Huawei equipment in Optus's network. Subsequently, this software update functioned as a wiretap - it recorded data being transmitted over Optus's network and sent the data to servers in China. Finally, after a few days of operation, the unauthorized software update deleted itself.
The incident is reported to have occurred in early 2012. Given that Optus only started using Huawei equipment in March 2012, the incident occurred very early in Optus's 4G network rollout. Chinese intelligence agents may have wanted to use the cover of the (chaotic) bootstrapping activity for a new network to carry out their operation.
The operation also appears to have been a proof of concept. In principle, the wiretap code could have remained in place for multiple weeks or months, but at increasing risk of detection by Australian Intelligence services or Optus's system administrators. Likely, Chinese intelligence agents were merely validating that they had an adequate understanding of and access to Huawei's equipment to conduct a covert wiretap.
It is unclear from the public reporting if Huawei executives knew of the 2012 espionage operation, opposed the operation, or actively sanctioned it. Regardless, the Chinese government's access to the Huawei personnel that mattered for the operation - technical people that could facilitate the unauthorized update - is clear.
Note that the 2012 operation happened before the Chinese National Intelligence Law went into effect (in 2017). The law was not needed by Chinese intelligence agents to obtain cooperation from Huawei personnel. Effectively, the National Intelligence Law seems to have formalized the access that Chinese intelligence already had to Huawei (and other Chinese companies).
[Wiki1]: List of mobile network operators of the Asia Pacific region. Wikipedia. Retrieved January 27, 2022. https://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_the_Asia_Pacific_region#Australia
[SMH2012]: Optus picks Huawei to build 4G network. Syndey Morning Herald. March 14, 2012. https://www.smh.com.au/technology/optus-picks-huawei-to-build-4g-network-20120314-1uzke.html
[Reuters2012]: Australia blocks China's Huawei from broadband tender. Reuters. March 26, 2012. https://www.reuters.com/article/us-australia-huawei-nbn/australia-blocks-chinas-huawei-from-broadband-tender-idUSBRE82P0GA20120326
[Verge2012]: Australia bans Huawei from bidding on broadband network build-out due to security concerns. The Verge. March 26, 2012. https://www.theverge.com/2012/3/26/2903097/australia-ban-huawei-national-broadband-network-bid
[AFR2012]: Huawei signs Canberra Raiders sponsorship deal. The Australian Financial Review. March 31, 2012. https://www.afr.com/companies/telecommunications/huawei-signs-canberra-raiders-sponsorship-deal-20120330-j36k0
[ZDNet2013]: Abbott confirms NBN's ban on Huawei stays. ZDNet. October 31, 2013. https://www.zdnet.com/article/abbott-confirms-nbns-ban-on-huawei-stays/
[AFR2015]: Huawei's epic PR fail. Australian Financial Review. June 9, 2015.
[BBC2018]: Huawei and ZTE handed 5G network ban in Australia. BBC. August 23, 2018. https://www.bbc.com/news/technology-45281495
[SMH2018]: Huawei's history with Australia. Syndey Morning Herald. December 8, 2018. https://www.smh.com.au/business/companies/huawei-s-history-with-australia-20181207-p50kyj.html
[Nikkei2019]: Huawei to cut engineers in Australia and restructure after 5G ban. Nikkei Asia. August 23, 2019.
[AFR2020]: Locked out Huawei dissolves local board as work dries up. The Australian Financial Review. March 3, 2020.
[Herald2020]: NRL 2020: Huawei ends major sponsorship of Canberra Raiders. Herald Sun. August 31, 2020.
[LR2021]: How Australia came to ban Huawei. LightReading. May 21, 2021. https://www.lightreading.com/asia/how-australia-came-to-ban-huawei/d/d-id/769688
[Bloomberg2021]: Chinese Spies Accused of Using Huawei in Secret Australia Telecom Hack. Bloomberg. December 16, 2021.
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