"I have informed Spark that a significant network security risk was identified", Government Communications Security Bureau Director-General Andrew Hampton said separately on Wednesday.
Speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang expressed "serious concern", and said China-New Zealand business ties were mutually beneficial and win-win.
Vodafone New Zealand Ltd declined to comment on the matter. But over the past year under liberal Prime Minister Jacinda Ardern, New Zealand has pulled back somewhat, embracing a warmer relationship with Japan and putting resources into the Pacific, in part to counter China's growing influence there.
Spark is one of the major carriers in New Zealand and the first to file a request to start using the next-gen connectivity.
But the company said in a statement it's confident it can still launch its 5G network by July 2020.
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According to the New Zealand government, the ban is related to technology concerns rather than fears about Chinese government control, and it is giving Spark the chance to make changes to mitigate security risks.
Yesterday afternoon, Spark pre-empted the government and GCSB by announcing the security agency's finding, and saying it could not now use Huawei gear for its pending 5G upgrade to its mobile network. Spark said it would review the reasons behind the rejection before taking further action. Huawei mentioned that it has already signed more than 20 c0ntracts with providers related to 5G worldwide. "Moving forward, we will continue to provide our customers with innovative and secure 5G solutions", the Huawei spokesperson said.
Britain's cyber-security agency has warned that it still has "technical concerns" over Huawei following growing United States calls for its allies to block the controversial Chinese telecoms giant from rolling out its network technology, amid espionage fears.
The US and Australia have made a similar move over the Chinese company.
Huawei has already been practically blocked out of the USA market after six top USA intelligence chiefs, including the CIA, FBI, NSA and the director of national intelligence, told the Senate Intelligence Committee last February that they would not advise Americans to use products or services from Huawei.
However, Huawei, which is headquartered in Shenzhen, in southern China, has faced national security concerns in multiple countries.