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Huawei and ZTE 5G solutions are banned in Canada

The news: The Canadian government is giving telecom operators until June 2024 to divest themselves of equipment and managed services from Huawei and ZTE as part of a new telecommunications security framework, per The Register. 

Why it’s worth watching: The decision to ban Huawei and ZTE came after examination of 5G wireless technology. 

  • ”In 5G systems, sensitive functions will become increasingly decentralized and virtualized in order to reduce latency, and the number of devices they will connect will also grow exponentially. The government is committed to maximizing the social and economic benefits of 5G and access to telecommunications service … but not at the expense of security,” the government stated.
  • Canada previously excluded the two companies from “sensitive areas” of the country’s 3G, 4G, and LTE networks and ruled that companies need to stop buying equipment from the two companies by September 1, 2022.
  • A Nano Research poll found that 76% of Canadians support banning Huawei from the country’s 5G telecommunications networks. Nearly 70% of Canadian adults oppose negotiating a free trade deal with China.
  • Canada will also impose restrictions on Gigabit Passive Optical Network (GPON) equipment used in fiber-optic networks. Its security review will “expand to consider risks from all key suppliers.”
  • The government reiterated that it had serious concerns about suppliers that “could be compelled to comply with extrajudicial directions from foreign governments. That would be in conflict with Canadian laws.”

What’s next? Canada cited allies having similar concerns. The country is part of the Five Eyes partnership with the US, the UK, Australia, and New Zealand. All those nations have already banned the equipment. 

  • Conservative Party MP Michael Chong said in a tweet, “It shouldn’t have taken more than 3 years for the government to ban Huawei when the Canadian Security Intelligence Service warned the government about potential threats in 2018.”
  • Critics are saying the move puts undue burden on telecom companies who now need to pay to replace existing equipment. The transition could result in service disruptions and comes at a time when supply chains are stretched thin.

The big takeaway: Canada’s decision could accelerate other countries weaning off reliance on Chinese technology while China itself seems to be eliminating dependence on foreign technology. 

The transition away from Huawei’s and ZTE’s equipment and solutions could take time and result in huge expenses for carriers, which they will likely pass on to consumers.