The reason is the exact same one for which Huawei was banned from any US government setting and ZTE had to pay billions in fines for. Yes, national security concerns lead Australia to ban both companies, with the Australian Government considering that any supplier who cannot “adequately protect a 5G network from unauthorized access or interference” should not participate in the deployment of 5G.
Obviously, Huawei Australia reacted with sadness, just like most Australians who were expecting to see a 5G Huawei device unveiled at IFA Berlin.
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
“This new architecture provides a way to circumvent traditional security controls by exploiting equipment in the edge of the network – exploitation which may affect overall network integrity and availability, as well as the confidentiality of customer data.”
This is how the Australian Government explained its decision but many still suspect pressure from the US Government to marginalize Chinese vendors like Huawei and ZTE, especially in light of recent events. This, coupled with the US tariffs war that managed to sink a beloved PC Gaming brand already, spell a rocky year ahead for most companies with a heavy presence in China.