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Gillard Defends Huawei’s Ban From Australian Broadband

Australian Prime Minister Julia Gillard defended how her government awards project contracts after China’s largest maker of telephone equipment said it was told not to bid for work on the national broadband network.

“The decision we have taken is not in breach of any trade rules or trade regulations with China,” Gillard told reporters in Sydney today, saying the government had acted in the national interests. “It is a decision open to the Australian government. We’ve taken it for the right reasons, through the right process, based on the right advice.”

Huawei Technologies Co. said earlier this week it had been told by the Attorney General’s office it can’t bid for work on the project. The company, founded by Ren Zhengfei after his retirement from the Chinese army, has offered to limit all employees on the broadband project to security-cleared Australian citizens, open up its software code, and undergo a full audit of security measures in a bid to overcome the ban.

“We don’t have contracts that link us to the military,” Jeremy Mitchell, Huawei’s director of corporate public affairs in Australia, said in Bloomberg Television interview today. “We are purely a consumer company. We do $30 billion worth of contracts a year. You don’t do that if people don’t trust your company and your staff.” The ban was a “temporary setback,” he said.

Huawei was offered no reason for the ban, which appears related to concerns over cybersecurity, Mitchell said March 26. Gillard today said the ban was due to “national interests.”

Trading Partner

Fueled by its appetite for iron ore and coking coal, China is Australia’s top trading partner, surpassing Japan and the U.S., which is now third, compared with second in 1988. Two-way trade between the nations in the 12 months ending Sept. 30 reached A$110 billion ($114 billion), up 22 percent from the year before, according to the Australian Bureau of Statistics.

“We’ve got a strong, robust relationship with China,” Gillard said of Australia’s largest trading partner. “I’m not surprised this is a moment where we’re seeing one thing differently.”

Gillard said today the network will provide fiber-optic access to about 3.5 million premises in Australia by mid-2015. The NBN plans to roll out fiber to 93 percent of Australia’s population during the next decade, with the rest served by wireless and satellite.

Telstra Corp. (TLS), Australia’s biggest phone company, has backed the government’s proposal to give up control of its copper-wire network in return for A$11 billion from the government-backed fiber network.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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