Canada bans Huawei, ZTE equipment citing threats to national security
HJBC/iStock Editorial via Getty Images Joining the rest of the Five Eyes intelligence-sharing network, Canada is banning China's Huawei Technologies and ZTE Corp (OTCPK:ZTCOY) from providing 5G (and even 4G) services in the country. Providers who have already installed the gear will also be required to remove it without compensation or reimbursement. With regards to deadlines, 5G machinery must be taken out by June 2024, while companies using related 4G equipment must clear them from their networks by the end of 2027. Snapshot: The decision follows a nearly four-year national security review, prompted by the the U.S. due to espionage concerns. Washington has cited fears over the potential use of 5G equipment as a backdoor for spying by the Chinese government, even warning allies it would limit intelligence sharing with countries that use Huawei equipment. "This is very much in line with what our allies have been doing in order to protect a critical piece of infrastructure," said Francois-Philippe Champagne, Canada's Minister of Innovation, Science and Industry. Fearing a coming ban, Bell Canada (NYSE:BCE) and Telus (NYSE:TU), two of the nation's largest wireless players, have already started to exclude Huawei from their network buildouts, opting for alternative gear from Sweden's Ericsson (NASDAQ:ERIC) and Finland's Nokia (NYSE:NOK). The Chinese embassy in Canada was quick to slam the announcement, calling it politically motivated and a violation of the principles of free trade and market economies. "China will take all necessary measures to protect the interests of Chinese companies," according to a spokesperson. Go deeper: Huawei has sold over $700M worth of telecommunications equipment to Canada since the security review was first initiated in 2018. The firm has also "diversified its network by spending $300M/year on Canadian R&D and by selling consumer products, so this so-called 5G ban only targets one small and declining aspect of out business in Canada," said company executive Alykhan Velshi. "While we are disappointed by the decision, Huawei will still be part of Canada's telecommunications network, and even 5G, because of the software that we are currently in the process of deploying with our partners."