A letter written by Huawei New Zealand managing director Yanek Fan to the Government Communications Security Bureau suggests the company will pull out of New Zealand if it is blocked from selling 5G network equipment. The letter was leaked to the media earlier this week.

In the letter Fan writes that it would be “arbitrary and capricious” to single out Huawei when other 5G suppliers have links to China. He notes that alternative 5G suppliers Cisco, Nokia and Ericsson all have Chinese joint ventures. Moreover the Nokia Shanghai Bell joint venture is with the Chinese government.

Fan also repeats the company’s earlier complaint about the lack of engagement from government.

In the letter Fan quotes research showing that without Huawei in the market, it could cost local telcos between 15 and 35 percent more to roll out their 5G networks.

To date New Zealand has not formally banned Huawei from working on 5G networks. The company is banned in Australia where it still maintains a sizeable presence. The GCSB did reject Spark’s 5G rollout proposal that included Huawei equipment and know-how on the grounds it had security concerns.

It then invited Spark to work with the GCSB to mitigate the risks. Spark has yet to do this.

A Huawei pull-out will have some impact on the mobile handset market, the company is the third most popular phone brand in New Zealand. However, it is a long way behind Samsung and Apple.

Elsewhere Huawei equipment is used in some UFB fibre areas. The company’s routers are also used to connect some service providers’ customers to broadband. Both Spark and Vodafone use Huawei hardware to connect fixed wireless broadband customers.