Telstra Facing New Dilema After ZTE Shortlisted For 5G Network Build
Telstra is facing a new dilemma after it was revealed that ZTE the Chinese Company whose smartphones they stopped selling after the Company was banned by the US Government is on the Companies short list to build out their new 5G network.
ZTE, who have a record of systemic corruption, is bidding for Telstra’s 5G mobile network build contract, a move that some say could lead to Chinese Government linked organisations being able to easily spy on Australians.
An investigation by Fairfax Media recently found ZTE not only paid $US12.8 million ($17 million) in bribes to secure one contract in West Africa but had a designated internal department and multiple layers of management to approve these payments, according to a former insider.
Documents show the bribes were meticulously recorded and ran to more than 20 per cent of one contract’s value, helping to explain how ZTE rapidly became the world’s third largest supplier of telecommunications equipment by 2012.
ZTE is also one of two companies shortlisted for a $120 million contract to roll out a communications system for Perth’s metropolitan rail system.
Last week and as tipped by ChannelNews Telstra who are struggling to deliver consistent broadband or 4G services, pulled the plug on the sales of ZTE phones and mobile broadband devices, due to the US ban.
ZTE is appealing the US ban that will result in them not being able to get access to the Android OS or US made components such as Qualcomm processors.
Some of the bribes exposed by Fairfax, were disguised by creating false or inflated invoices issued to a company, MR International, which was ostensibly contracted to build telecommunications infrastructure.
The revelations could create further problems for ZTE as they appear to breach the tough US Foreign Corrupt Practices Act and could be used by regulators in Washington to further sanction the company.
They are also likely to cause problems for the company as it seeks to expand in Australia. The federal government said it was considering what, if any, sanctions to place on ZTE, after the US ban.
ZTE and Huawei beat Ericsson Australia, Optus and Ansaldo STS, a subsidiary of Japanese firm Hitachi, to be the final two short-listed candidates.
The issue of Huawei or ZTE building Australia’s 5G networks was raised by national security agencies in Washington during Prime Minister Malcolm Turnbull’s visit in February.