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Ottawa Delays WIND Mobile Deals, Security Concerns Over Huawei Infrastructure

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VimpelCom’s takeover of Wind Mobile, which was supposed to have been completed within six weeks, is taking more than eights months. The reason? National security concerns raised by the federal government.

WIND mobile goes live in Kingston

According to multiple sources familiar with the matter, as cited by the Globe and Mail, Ottawa is hesitating before giving the go-ahead for Dutch company VimpelCom to take full control of Wind Mobile for two reasons: first, VimpelCom is controlled by Russia’s second-richest man; and secondly, Wind has built its core network by using Huawei (a Chinese Chinese telecoms equipment company) gear.

Founded by a former member of the People’s Liberation Army, Huawei has been facing accusations for a while now from US politicians that its gear (which is at the core of Wind’s network) is designed to enable the Chinese government to intercept and sabotage foreign communications systems.

Both Wind Mobile and Huawei officials emphasized the lack of security breaches, hacking, spying, or other such activities, but this wasn’t enough for officials.
When contacted about the delay in the decision, Industry Canada replied:

“The government is clearly committed to encouraging competition in the wireless sector. The strict confidentiality provisions of the Investment Canada Act do not allow further comment on this investment at this time,” Industry Canada wrote in an e-mailed statement.

Yet the back and forth will probably continue until July 4, which is the final deadline for the decision. VimpelCom’s takeover of Wind Mobile will be the first materialization of the updated foreign-investment rules, which allow full foreign control of telcos with up to 10% market share.

A decision on whether to allow VimpelCom to acquire full ownership of Wind must now be made before July 4. One stumbling block is that Mr. Lacavera’s buyout deal expires on June 30, according to people familiar with the matter.

An official statement from VimpelCom states:

“VimpelCom is a company registered in Bermuda, headquartered in Amsterdam and listed on the NYSE. Our governance structure reflects our international provenance and we would strongly refute and take issue with any statement which suggested that should VimpelCom achieve control of this or any other business there would be any increased risk of security breaches,” VimpelCom spokesman Bobby Leach said in an e-mail.

Wind Mobile, on the other hand, has taken action to comply with the government’s expectations:

“We work co-operatively and proactively with CSIS and other law-enforcement agencies (federally and provincially) on both security and emergency/9-11 matters. … Although we regularly work alongside these agencies on security matters, we must emphasize that we have never had any security issues with our network,” Wind said in a statement.

Huawei has been operating in Canada since 2008 without issue.

“From the beginning, we’ve operated in an environment that has placed a premium on ensuring the security of networks in Canada, and we continue to work transparently and openly with our carrier partners and the federal government to ensure the equipment we provide in Canada is safe, secure and reliable,” Scott Bradley, spokesman with Huawei Technologies Canada Co. Ltd. wrote. “Any suggestion to the contrary is completely false. We are proud of our contribution to Canada’s telecom industry.”

Yet the Chinese company poses a national security threat alongside ZTE in the eyes of the US and Australian governments, despite being at the core of the UK cellular network. The US committee has found that Huawei likely has substantially benefited from the support of the Chinese government. The company rejected allegations that it is being financed to undertake research and development for the Chinese military, but the US committee claims it has received internal Huawei documentation from former employees showing the company provides special network services to an entity alleged to be an elite cyberwarfare unit within the People’s Liberation Army.

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  • Peter

    Whoever wrote this needs to learn how to spell, proofread and/or get an editor to check their work before publishing ever again.

  • Jenny

    So basically because the US government thinks the Chinese are doing something….

    Doesn’t the US government try to blame everything on terrorism to deflect attention from the things it’s doing?

  • Peters mom

    You’re an idiot who needs a spellcheck on life.

  • Chrome262

    seriously, I think its a good move, I don’t want Wind to disappear and we need competition, but you can’t have unlimited access to peoples private data, whether its a foreign power, or our own government.

  • Jenny

    Obviously I agree you can’t allow foreign government hidden access to our information but that was not my point.

    My point was is this a true concern and are there valid reasons to believing the Chinese have hidden access or is our government just listening to the US government?

    Let’s not forget the current issues with the NSA leak in the US and how their government is in fact listening in on people’s private data.

  • 1His_Nibs1

    Here’s a realization for you: Cell phone’s conversations/data is much more easily intercepted than a regular landline. Landlines need to be tapped into as there are no “radio waves” involved. So if you’re concerned about the American or Canadian government (or any world government for that matter) intercepting your phone’s transmissions you might want to ditch it and go back to a landline.

  • 1His_Nibs1

    If you don’t think CSIS is doing this to Canadians, you, my dear are naïve. (listening in on Canadian’s phone transmissions)

  • Chrome262

    Isn’t just the US government, its Australia as well, the fact of the mater is that US, UK, and yes even Australia have better intelligence organizations then (better funded for sure) the we do up here. CSIS tries but relies heavily on the rest of their allies. That is why they are taking seriously what has been said about Huawei and Vimpelcom.

  • Chrome262

    Sure, but its even easier if you have a back door to the network, you don’t have to do pesky things like decrypt the signal.

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