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Huawei warns Australians face higher 5G prices after ban

Company forced to refocus in country after "unreasonable" bar

Huawei is being indicted by the U.S. Justice Department on charges of intellectual property thefts and U.S. sanctions violations.(Photo by Tomoki Mera)

SYDNEY -- Huawei Technologies has hit out at Australia's ban on its involvement in fifth-generation mobile networks as an "unreasonable" decision that will push up costs to consumers.

John Lord, chairman of Huawei Technologies (Australia), told Nikkei in an interview that the ban imposed last August would mean less competition and could boost prices to consumers by as much as 15% to 30%. The 5G rollout would also take more time without Huawei, he said.

The ban was "unreasonable" but, "we have to accept the decision," Lord said. Going down the legal route would simply be too time-consuming.

Meanwhile, Huawei would have to rethink its business in Australia, he added. "If you look further down the track, our revenue growth will fall, will slow," he said. "As 5G starts to come in, we are obviously not going to be in that market share, so we will have to reshape our business and our business model to get revenue from other sources."

Huawei was slapped with the ban in August as Washington lobbied allies to stop using equipment made by the company and ZTE, saying that they could be used for cyber espionage. Australian telecom operators have been scrambling to respond to the crackdown, with TPG Telecom saying on Tuesday that it had abandoned plans to launch its 5G service.

Huawei, which has risen to become the world's largest telecom equipment maker, is being indicted by the U.S. Justice Department on charges of intellectual property theft and U.S. sanctions violations.

Huawei controls half of Australia's 4G wireless services market. In addition, it is the country's third-largest smartphone vendor and it has plans to launch internet-of-things services to businesses. Handsets are seen as a potential source of growth.

John Lord, chairman of Huawei Technologies (Australia) insisted that Huawei doesn't authorize illegal action.(Photo by Fumi Matsumoto)

The Asia-Pacific region accounted for 12.3% of the company's sales last year. No country breakdown is provided in its annual report.

Lord sought to dispel the allegations against the company. "Huawei is getting drawn into the very complicated relationship between the U.S. and China... We are a private company. We really are trying to do our business one-on-one with every country we are in."

Lord added that Huawei will "let those allegations go before the court and we hope for a successful conclusion, that there is no substantiation."

Concerns about Huawei stem in part from China's implementation of a national intelligence law in 2017. The law obliges any Chinese citizen or company to cooperate with Beijing's espionage work if asked to do so.

Lord stressed that the law does not apply outside of China and that the company obeys the rules of any country it operates in.

In January, a Huawei employee was arrested in Poland for espionage on behalf of Beijing, and was fired by the company. The U.S. Department of Justice alleged that the company has a policy of rewarding employees who steal confidential information from competitors -- a claim refuted by Lord.

"Huawei is a big company and sometimes people may do things which are wrong and if they do, they are very quickly moved on as we saw recently with one of our employees in Poland," he said.

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