EU Telecoms Network Huawei Ban Cost Higher Than Estimated, Says GSMA

The European Union’s plan to rid its telecoms network of potentially risky suppliers like Huawei will cost up to four times as much as the bloc’s official estimate, a leading industry body said Wednesday.

GSMA, a global trade body representing the telecom industry, said in a report that the direct cost of replacing equipment from so-called high-risk vendors would be €30 to €40 billion.

That’s significantly higher than the European Commission’s estimate of €3.4 to €4.3 billion per year for three years, which equates to approximately €10 to €13 billion in total.

The true cost of ripping up and replacing telecom equipment from Chinese manufacturers Huawei and ZTE — which the Commission proposed banning as part of a new EU Cybersecurity Act — is hotly contested, as is whether telecom operators should be compensated.

GSMA on Wednesday priced the removal of high-risk vendors from mobile networks at €16 to €22 billion, including costs from fixed networks at €5 billion and from transport networks at €9 to €12 billion.

The trade body also said there would be an additional cost of €8.5 billion from 2027 to 2030 because there would be less competition among manufacturers of telecom equipment, leading to higher prices.

Some experts dispute the figures. “GSMA estimates are gross, not incremental,” said Hosuk Lee-Makiyama, director at think tank ECIPE. If the study deducted “replacement costs that would have occurred anyway,” it would arrive at roughly the same figures as the Commission, he argued.

The Commission did not immediately respond to a request for comment.