We have been informed by the Govt that Huawei & ZTE have been banned from providing 5G technology to Australia. This is a extremely disappointing result for consumers. Huawei is a world leader in 5G. Has safely & securely delivered wireless technology in Aust for close to 15 yrs — Huawei Australia (@HuaweiOZ) August 22, 2018

FT says Australia is the first country to explicitly prohibit local carriers from working with the companies -- the US government's ban only covers its personnel, agencies and contractors. In a statement, the Australian government said:

"The involvement of vendors who are likely to be subject to extrajudicial directions from foreign governments that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference."

Under China's laws, companies and organizations are required to assist in its intelligence efforts when asked. The country's authorities are clearly concerned about the possibility of the Chinese firms leaving Australia's 5G network vulnerable to infiltration on purpose for espionage purposes. A government official told Reuters that the ban was aimed at Huawei, in particular, probably because it already sent the country an offer to oversee its 5G development and to supply the network's equipment, including base stations and towers.