A report analysing the costs involved with removing Chinese telecoms equipment in Europe has trashed concerns it will be a lot more than in the US.
The US has just pledged $1 billion for rural mobile networks to replace Chinese telecoms equipment in the country. European nations are still debating whether to follow the US’ lead, but concerns about the cost are a factor.
Earlier this year, Huawei funded an analysis which calculated the cost of removing Chinese telecoms equipment from Europe would be as eye-watering as $62 billion.
According to Strand Consult, most of Europe’s networks are around 3-5 years old and ready to be replaced. This was not factored into the Huawei-funded analysis.
The firm believes 70-80 percent of equipment needs replacing and that around $2.9 billion has been spent annually over the past three years in doing so. Approximately 40 percent of this equipment was acquired from Chinese telecoms vendors like Huawei or ZTE.
If Europe was to go ahead with replacing Chinese telecoms equipment, Strand estimates the cost – based on the above figures – to be around $3.5 billion. This equates to a one-time cost to each mobile subscriber of approximately $7 (€6.50).
Speaking to Forbes, Strand said:
“Those sceptical of the claims that Chinese-made telecom equipment poses a threat to security should ask themselves whether they would be okay with NATO buying a fighter plane made in China.
Why is there universal agreement that military equipment from China should be restricted but not telecom networks where vital information is transported?”
The US has been making the same point as Strand for some time. Despite never outright banning Chinese telecoms vendors, the US limited the use of their equipment by preventing any carrier which did from accessing government contracts and subsidies. No major US operator uses Chinese telecoms equipment, but some rural ones do.
US-China Trade War
Amid the wider ‘trade war’ between the US and China, Huawei has found itself in the crossfire. The Chinese tech behemoth is listed on the Entity List of the United States Department of Commerce, which prohibits US companies from doing business with these firms without first obtaining a license.
Huawei’s presence on the list has not just affected its telecoms equipment arm but also its consumer devices. The company’s latest flagship smartphone, the Mate 30 Pro, is launching without access to Google’s services.
In response to the US trade situation, Huawei is decreasing its reliance on American companies. Speaking at a forum this week, Huawei founder and CEO Ren Zhengfei said his company has begun producing 5G base stations without US components.
“We carried out the testing in August and September, and from October on we will start scale production,” Zhengfei said.
Zhengfei also said Huawei is willing to license its 5G mobile technology to a US firm if it helps to alleviate security concerns over its products.
Many carriers around the globe would welcome access, whether continued or for the first time, to Huawei’s highly-regarded equipment. However, security officials must be satisfied that any risk posed by the use of Chinese telecoms equipment has been sufficiently mitigated.
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