Chinese vendor Huawei has reportedly been excluded from tendering for projects rolling out Australia's national broadband network (NBN), in a move that could spark an international trade dispute.
The Australian Financial Review on Saturday broke the news that the government has banned Huawei from participating in NBN contracts due to security concerns.
The attorney-general's office has reportedly made the decision because of worries it could make the network more vulnerable to cyber attacks originating from China.
But Huawei has been using diplomatic channels to fight the ban, and has hinted that it may seek intervention by the Chinese government if the ban is not lifted.
Huawei is a significant provider of telecom equipment to Australian operators, having previously had deals with Optus and Vodafone Australia and trials with Telstra. The operator is also providing equipment for eight of the world's nine NBNs under construction.
But in a press statement, the attorney-general's office has defended the ban as necessary due to the strategic importance of the NBN project.
This is not the first time Huawei has been excluded from a project due to worries about cyberespionage by the Chinese government.
It has been left out of the running for several government-funded deals in the US, most recently a nationwide emergency network program, and also briefly faced a ban on doing business in India until this decision was overturned.
The vendor has also repeatedly found itself having to deny that it has ties to the Chinese military.