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Cost of replacing Huawei kit in Europe could be £2.8bn

(Image credit: Karlis Dambrans / Shutterstock)

The total cost of replacing telecommunications equipment made by Chinese vendors in Europe would be around $3.5 billion (£2.82bn), a new analysis has claimed. This is far less than the sum quoted by mobile industry body the GSMA.

Huawei, and to a lesser extent ZTE, command 40 per cent of the European telco equipment market but have effectively been frozen out of the US on national security grounds.

Huawei has frequently denied any allegations that its products are a security risk, while the US government has produced no evidence of any wrongdoing. Nonetheless, Washington is now urging allies to follow its lead and ban Huawei from their 5G deployments.

Huawei 5G kit cost

European operators have frequently voiced their opposition to any ban, arguing that excluding Huawei would result in decreased innovation and higher prices.

A GSMA report suggested the cost of replacing Chinese-made gear would be as high as €55 billion (£48.6bn), while the rollout of 5G could be delayed by up to 18 months.

However a report from Stand Consult said examples from the USA and Australia showed that not using ZTE or Huawei had not increased prices or delayed rollout.

The report said that because European operators need to replace significant amounts of aging or non-upgradable radio kit regardless of the Huawei ban, the cost would be much less. Strand estimates the cost of replacing Huawei or ZTE kit that could be upgraded to 5G is around $3.5 billion.

The UK has been carrying out its own assessment on the future role of Huawei in the UK’s telecoms infrastructure but a final decision has yet to be made.  Leaks suggested Huawei would be banned from core network infrastructure but not the radio element of 5G networks – effectively maintaining the status quo. However upon publication, the review omitted the final ruling.

A separate report has claimed any ban would jeopardise the UK’s position as a 5G leader by delaying the widespread availability of services by 18-24 months. This could cost the UK economy as much as £6.8 billion.