US, Japan and Australia challenge Huawei in Papua New Guinea

The United States, Japan and Australia are cooperating on a domestic internet cable proposal for Papua New Guinea as an alternative to an offer by Huawei, the Chinese telecommunications giant that the United States regards as a cybersecurity threat, a US diplomat said Friday.

The Australian government blocked Huawei in August from rolling out Australia's 5G network due to security issues and has concerns about the company's involvement in the telecommunication infrastructure of its nearest neighbor, Papua New Guinea.

The US charge d'affaires to Australia, James Carouso, said the three Pacific defense allies were negotiating with the impoverished South Pacific island nation of 8 million people, mostly subsistence farmers, on its internet contract.

"We're working on a counter offer," Carouso told Australian Broadcasting Corp.

"These are negotiations that are going on. Absolutely up to the PNG government at the end of the day." Papua New Guinea minister Justin Tkatchenko said his government was willing to work with Australia on the internet network if it offered a better deal than Huawei, The Australian newspaper reported Friday.

"I know Australia is against Huawei in many situations, thinking they are going to spy on everybody and take all their information," Tkatchenko told the newspaper.

"But we will work with Australia, with China, with Huawei, in that regard to get the best possible outcome for our people and for communications domestically as well." Tkatchenko could not be contacted on Friday for comment.

Australia proposed the funding for the 5,457-kilometre internet network that will provide undersea cabling to connect 14 provincial centres as the first investment of a new trilateral infrastructure fund established this year to counter growing Chinese influence in the Indo-Pacific region, the newspaper said.

The Huawei option would involve a USD 198 million loan from China's Eximbank, the newspaper said.

Australia agreed in June to pay most of the USD 101 million price tag for an undersea internet cable from a Sydney broadband hub to Papua New Guinea and the Solomon Islands. The new Papua New Guinea domestic network would link into that cable.

Australia stepped into that project after the Solomons' government signed a contract with Huawei in 2017 to build the cable. The Solomons consequently scrapped the Huawei deal.

Several governments have been scrutinizing Huawei over its links to the Chinese government. The private Chinese company started by a former People's Liberation Army major in 1987 suffered a setback in the US market in 2012 when a congressional report said it was a security risk and warned phone companies not to buy its equipment.

Shenzhen-based Huawei, the world's largest telecommunications equipment supplier, had also been banned from bidding for contracts for Australia's broadband network in 2011.

The US House Intelligence Committee previously found that Huawei was tied to the Chinese government and had failed to provide responsive and detailed answers about that relationship and about its US operations.

Huawei denied being financed to undertake research and development for the Chinese military, but the committee said it had received internal Huawei documents showing the company provided special network services to an entity alleged to be an elite cyber-warfare unit within the People's Liberation Army.