Huawei may open source code

A telecommunications expert said Wednesday that Huawei Technologies should take the risk of releasing part of its device source code to re-enter bidding for a huge national broadband network (NBN) project in Australia, as such risks would be manageable.

Huawei, one of the world's largest telecom equipment providers, has said it still hopes to tender for the $38 billion NBN contracts after being blocked by the Australian government for national security reasons, Reuters reported Wednesday. Huawei is prepared to make concessions to re-enter the tender.

"These concessions could include opening up the source code its devices use and ensuring only Australian citizens who are security-cleared work on the project," Reuters reported, citing Jeremy Mitchell, director for corporate affairs at Huawei Australia, New Zealand and South Pacific.

"The source code is an IT company's root of life," Zhang Zhongfei, a professor at Zhejiang University, told the Global Times yesterday. "If it is opened up, then everyone else knows your technology. That said, the legal system in Australia is well established, so even if Huawei opens it up, other companies could not copy it right away due to intellectual property rights."

Huawei is not the first to find itself in this situation, Zhang said. "Competition in the IT industry is ferocious, and companies like Google and Yahoo have made such moves before to win clients," he said.

It is worthwhile for Huawei to share some source code for its current devices, as long as it is similar to that used by NBN, in order to build up trust, Zhang said. "The actual code will be redesigned to ensure network security after it wins the tender."

The telecom device maker is building NBN-style networks in the UK, New Zealand, Singapore, and other countries, according to a statement from Huawei received by the Global Times Monday.

"We want to be open and transparent," Mitchell said. "We are confident that we can get over this hurdle."

Zhang said the risks of the suggested move are limited, "because if other companies try to rip the code off directly from Huawei, they will be sued. If they try to copy and modify, this will take some time by which point the software may be out of date."

Huawei's situation was typical, as most Western economies have unjustified fears over Chinese investment in industries overseas, Li Xiangyang, director of National Institute of International Strategy at Chinese Academy of Social Sciences, said yesterday.

"They welcome China as a pure financial backer, buying their bonds and treasury bills," Li said. "But the Chinese enterprises prefer industry investment, as overseas financial investments are deemed to be riskier."