Key facts
- The GSMA estimates the cost of replacing telecom equipment from high-risk vendors like Huawei will be between €30 billion and €40 billion.
- This estimate significantly surpasses the European Commission's projection of €10 billion to €13 billion.
- The GSMA's breakdown includes €16-€22 billion for mobile networks, €5 billion for fixed networks, and €9-€12 billion for transport networks.
- An additional €8.5 billion cost is anticipated between 2027 and 2030 due to decreased competition among equipment manufacturers.
- Some experts question the GSMA's figures, suggesting they do not account for replacement costs that would have occurred regardless.
The European Union's initiative to remove equipment from potentially risky suppliers like Huawei from its telecommunications networks could incur costs significantly higher than initially estimated by the European Commission, according to a report by the GSMA, a global trade body for the telecom industry.
The GSMA estimates that the direct cost of replacing equipment from vendors deemed 'high-risk' will range from €30 billion to €40 billion. This figure substantially exceeds the European Commission's projection, which estimated costs of €3.4 to €4.3 billion per year over three years, totaling approximately €10 billion to €13 billion.
The trade body detailed its cost breakdown, placing the removal of high-risk vendors from mobile networks at €16 billion to €22 billion. Costs for fixed networks are estimated at €5 billion, and for transport networks at €9 billion to €12 billion. Furthermore, the GSMA predicts an additional €8.5 billion expense between 2027 and 2030, attributing this to a projected decrease in competition among telecom equipment manufacturers, which would lead to higher prices.
However, some experts have raised doubts about the GSMA's figures. Hosuk Lee-Makiyama, director at the ECIPE think tank, argued that the GSMA's estimates are 'gross, not incremental.' He suggested that if the study were to deduct replacement costs that would have been incurred regardless, the figures would align more closely with those provided by the European Commission. The Commission had not immediately responded to a request for comment on these disputed figures.