Chinese telecom giant Huawei faces the prospect of being barred from yet another major project in Australia because of national security concerns.

Key points: Senior US security officials have raised concerns over Chinese telecom companies

Senior US security officials have raised concerns over Chinese telecom companies Huawei Australia denies its 5G technology poses a security risk

Huawei Australia denies its 5G technology poses a security risk The company was blocked from tendering for the NBN in 2012

This time the concern is around the building of 5G mobile networks.

The Australian Financial Review reported late last month that the Critical Infrastructure Centre within the newly created Department of Home Affairs would conduct a national security assessment of the company.

Under legislation passed last year, the Federal Government has the power to direct carriers to take action protecting networks from national security risks.

In response to questions about this assessment, the department said "the Government is aware that the adoption of new technologies like 5G may introduce new threats and vulnerabilities".

The Chinese company, which is privately owned by its employees under a complex shareholding system, was blocked from tendering for the National Broadband Network (NBN) in 2012, and 5G is anticipated to be a possible alternative to the NBN.

A Huawei Australia spokesperson said its 5G technology was not a security risk.

"We are committed to openness and transparency in everything we do," the statement said.

"Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT [Information and Communications Technology] vendor."

Fifth Generation (5G) mobile network technology promises much higher connection speeds compared to the current 4G network, and innovations like self-driving cars will require access to high-speed mobile data.

The technology will become a core piece of infrastructure in the future as users grow increasingly reliant on fast mobile internet.

'China can switch intent and harness these tools'

Fergus Hanson from the Australian Strategic Policy Institute said there was concern that using Huawei's technology to build 5G networks may create security vulnerabilities down the track.

"Let's say for example there's a war. China decides to invade Taiwan, and then Australia suddenly becomes a hostile adversary," he said.

"[China] can switch their intent, and therefore harness these tools that they've got sitting there latently.

"Even if we believe in Huawei's independence, at any point it could be forced under the control of the Chinese Government."

Last month FBI director Chris Wray warned the US Senate Intelligence Committee about the threat posed by companies "beholden to foreign governments that don't share our values".

Mr Wray said Huawei and fellow Chinese telecom company ZTE could "exert pressure or control" over US infrastructure if they were able to gain positions of power within the country's telecommunications network.

However, Mr Hanson believes the statements from US officials did not go far enough.

"Government basically has to provide guidance — you've either got to say these guys are fine, or they're not'," he said.

"The US has applied pressure and not really imposed a ban."

Australia discussing how to deal with this

A Department of Home Affairs spokesperson said new Telecommunications Sector Security Reforms (TSSR), passed last September, allowed it to advise carriers about potential security risks.

The TSSR allows the Attorney-General to direct carriers to take actions "reasonably necessary" to protect networks from national security risks.

"There's a live discussion going on right now in the Australian Government about how you deal with this, and I don't think there's a clear outcome on how they're going to respond," Mr Hanson said.

While the US is pressuring carriers not to use technology from Huawei or ZTE, other countries have taken an approach seeking to mitigate perceived security risks.

Huawei and the UK Government set up a special cyber security evaluation centre which allows authorities to evaluate the products the firm uses in the UK market.

Mr Hanson said if the Australian Government failed to give clear guidance to carriers, it could lead to problems in the telecommunications market.

"You could have a situation where one company decides not to use Huawei technologies from a national security point of view — it would be a more expensive network, and potentially with not as many bells and whistles," he said.

"That would disadvantage it against others that decided to use Huawei technology.

"Similarly, if you had those other companies that did use Huawei technology, and there was a subsequent government decision that it was too risky and they had to remove it, then you'd have huge remuneration costs.

"So I think it's really important to signal now what the position is."

