Despite NBN ban, Huawei reinvests profits into Australia

Huawei has made a decision to start reinvesting local profits back into the Australian market, even though it has been banned from tendering on the National Broadband Network.

Despite being banned from participating in the roll-out of the National Broadband Network (NBN), Huawei has decided to reinvest any local profits back into Australia.

During a visit to Huawei's Australian board of directors, Huawei CEO and founder Ren Zhengfei said that the company should continue its localisation strategy and begin to reinvest its local profits into the Australian market.

Zhengfei's visit to Australia comes on the first anniversary of Huawei establishing a local board .

"It's very encouraging to have such strong support from Huawei's CEO as we continue to expand the company's presence in Australia," said Huawei chairman John Lord.

"The decision to reinvest local profits into the Australian market will allow us to further cement Huawei's local presence, and continue to develop solid partnerships with Australian customers, universities and charities."

Huawei's local partnerships already include one with RMIT University for a Next Generation Technology Training Centre in Melbourne and includes AU$250,000 in funding; an intern and scholarship program at Macquarie University ; and an agreement to purchase equipment from Finisar's research, development and manufacturing hub in Sydney.

Despite these investments, Huawei's presence in Australia has not been without its problems. NBN Co banned Huawei from bidding on work related to the roll-out of the NBN in March this year, following advice from the Australian Security Intelligence Organisations (ASIO). The attorney general's office justified the ban by stating that, "as a strategic and significant government investment, we have a responsibility to do our utmost to protect [the NBN's] integrity and that of the information carried on it".

Freedom of information requests around why Huawei was banned have been denied by both NBN Co and the Attorney-General's Department, on the grounds that revealing documents "could result in harm to national security" and "cause damage to the international relations of the Commonwealth" .

Of 35 freedom of information requests on various issues filed to NBN Co, only two have been completely successful .

The Coalition has recently stated that, although it does not know the exact reason why Huawei was banned from bidding, it would be willing to reassess the blockade if it were to win the next federal election.

Across the Tasman, Huawei also announced today that it is signing a letter of intent with New Zealand frequency control device firm Rakon, which will see Huawei use Rakon's technology in its handsets, smart devices and infrastructure programs. The deal is expected to quadruple Rakon's sales to Huawei over the next five years and is worth a total of US$56 million.

Rakon managing director Brent Robinson said that the company had been working closely with Huawei for some years and that the agreement "validates our commitment to a strategy of globalisation and our investment in operations in China".

Rakon credits New Zealand Minister of Trade Tim Groser and the New Zealand Trade and Enterprise (NZTE) for their help with setting up the deal.

"Successful global partnerships are key to the growth of New Zealand companies internationally," NZTE chief executive Peter Chrisp said in a statement.

"Rakon's advanced technology tells a great story for New Zealand and their commitment to China, and the potential it offers is a good example of what a long-term approach can deliver".