- Huawei removal could cost Europe up to €40 billion, GSMA estimates
- GSMA expects reduced competition to increase telecom equipment prices significantly
- Experts disagree over the true financial impact of Huawei's removal
The European Union's plan to remove supposedly high-risk telecom vendors such as Huawei and ZTE could cost far more than Brussels currently estimates, new figures have claimed
The GSMA trade body has said that direct replacement costs would reach €30 to €40 billion - roughly four times higher than the European Commission's own estimate of €10 to €13 billion in total.
Under the Commission's own projections, the transition away from Chinese equipment would cost between €3.4 billion and €4.3 billion annually across a three-year rollout - that annual estimate equates to a total cost of roughly €10 to €13 billion once the full three-year period concludes.
A costly clash over Chinese telecom equipment
The push to remove Huawei and ZTE from European networks traces back to security concerns raised in the early 2010s.
Several EU governments began restricting Chinese vendors after the United States pressured allies to exclude them from next-generation 5G infrastructure.
The debate intensified further as multiple member states moved to ban Chinese equipment from their national 5G core networks entirely.
The European Commission later proposed a formal ban on high-risk suppliers as part of a new EU Cybersecurity Act now under active negotiation.
GSMA's €30 to €40 billion figure is a one-time total, and it breaks down into fixed networks at €5 billion and transport networks at €9 to €12 billion.
It also projects an extra €8.5 billion in costs between 2027 and 2030 from reduced competition among equipment manufacturers, a cost the Commission's figures do not appear to include.
GSMA attributes that added expense to fewer companies competing for contracts once high-risk vendors are excluded entirely from the market.
Telecom operators across the bloc have already begun pressing regulators for financial compensation tied to the mandated equipment replacement.
Experts clash over whose numbers are accurate
Some economists dispute GSMA's figures, arguing the estimates fail to separate new costs from expenses that would have occurred regardless.
"GSMA estimates are gross, not incremental," said Hosuk Lee-Makiyama, director at think tank ECIPE.
He argued that subtracting replacement costs that would have occurred anyway would bring the totals close to the Commission's own figures.
Lee-Makiyama's critique suggests the true gap between industry and Commission estimates may be lower. The European Commission had not responded to requests for comment on the dispute.
GSMA's report arrives as negotiations over the Cybersecurity Act continue among EU member states and telecom industry representatives.
Any eventual compensation scheme would likely require agreement among national governments already divided over how quickly to remove Chinese vendors.
This is not the first time GSMA's figures have contrasted sharply with the European Commission's or individual analysts' estimates.
In 2019, GSMA projected that replacing Chinese-made telecommunications equipment across Europe could cost as much as €55 billion in total.
Strand Consult, by contrast, estimated the cost of replacing Huawei or ZTE equipment eligible for 5G upgrades at around $3.5 billion.
Whether the final cost this time lands closer to Brussels' modest estimate or GSMA's far larger figure remains genuinely unresolved for now.
Via Politico
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