Friday 07 June 2019 2:43 pm

Ban on Chinese telecoms vendors would add $62bn to Europe’s 5G bill

A pedestrian walks past a Huawei product stand at an EE telecommunications shop in central London on April 29, 2019. – British Foreign Secretary Jeremy Hunt has urged caution over the role of China’s Huawei in the UK, saying the government should think carefully before opening its doors to the technology giant to develop next-generation 5G mobile networks. His comments come after Prime Minister Theresa May conditionally allowed China’s Huawei to build the UK 5G network, information that was leaked to a newspaper from top secret discussions between senior ministers and security officials, a leak that has caused a scandal that has rocked Britain’s splintered government. (Photo by Tolga Akmen / various sources / AFP) (Photo credit should read TOLGA AKMEN/AFP/Getty Images)

A ban on buying telecoms equipment from Chinese vendors would add $62bn (£48bn) to the cost of 5G networks in Europe, according to an industry analysis.

The Trump administration blacklisted purchases Huawei in May as part of a long-running dispute with the company. The United States alleges that Huawei is too close to the Chinese government and it could be using its telecoms products for espionage.

The moves prompted global tech giants such as Facebook and Google to cut ties with the Chinese company. European countries are under pressure to fall in line.

The ban came as telecoms operators worldwide gear up for the arrival for the next generation of mobile technology, known as 5G, which promises ultra-fast internet and increased connectivity.

The report comes from London-based telecoms lobby group GSMA, which represents the interests of 750 operators.

GSMA has already expressed concerns about the consequences of a full ban on Huawei, whose products are widely distributed across Europe.

The $62bn figure named in the report reflects the total additional costs that would come with a full ban on purchases from Huawei and ZTE ahead of the rollout of 5G networks in Europe.

“Half of this (additional cost) would be due to European operators being impacted by higher input costs following significant loss of competition in the mobile equipment market,” the report said.

“Additionally, operators would need to replace existing infrastructure before implementing 5G upgrades.”

Huawei and ZTE account for a 40 per cent market share in the European Union.

A ban on Chinese vendors would also cause a delay of 18-months, according to the report.

The delay would result from delivery challenges for other major equipment makers, such as Ericsson, Nokia and Samsung, would be left to pick up the slack.

It would also follow from the need for telecoms operators to transition from one set of equipment to another.