The Government's spy agency is raising concerns about part of Spark's proposed 5G network, citing significant risks to national security.
Spark wanted to start using Huawei cellphone tower equipment from 2020, and recently notified director-general of the Government Communications Security Bureau (GCSB) Andrew Hampton about the proposal, as is required by law.
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But after carrying out an assessment, the GCSB identified major network security risks if the technology was to be implemented.
On Wednesday, Mr Hampton informed Spark of the GCSB's findings, which means the 5G plan cannot go ahead.
A spokesperson for Spark says the company will review the detailed reasoning behind the GCSB's decision and consider what steps it will take, if any.
"While we are disappointed with this decision, we are confident that the decision will not affect our plans to launch Spark's 5G network by 1 July 2020, subject to the necessary spectrum being made available by the New Zealand Government."
Huawei has been banned from supplying 5G equipment in both Australia and the United States.
The Chinese company's ties to the Communist Party mean it's considered a security risk in these countries.
Newshub.