Yahoo Finance Stripping out Huawei 5G kit will cost telecoms industry £2bn
Stripping out Huawei equipment from the UK's 5G infrastructure could create mobile phone signals blackouts and cost the telecoms industry up to £2bn, according to industry experts.
Telecoms operators have already begun discussions with Huawei rivals such as Ericsson and Nokia, according to industry sources. However, it is believed any replacement kit from rivals will come at a premium.
An added complication is that most UK networks are building their 5G networks on top of their existing 4G infrastructure, which would mean that they may be forced to remove 4G as well as 5G Huawei equipment from their networks, further piling on costs.
“A big concern is that it would mean periods of downtime and people not having access to 4G,” said Assembly analyst Matthew Howett. “If this goes ahead, then it will mean that there will be a significant disruption to the 4G network.”
“This is hugely frustrating for the operators,” said James Barford, the director of telecoms at Enders Analysis, who came up with the estimate and has Huawei as a client.
That’s on top of an anticipated slowing in the speed of 5G being launched across the country. Vodafone has previously warned that the UK’s leadership in 5G will be lost if companies are forced to spend time and money replacing equipment.
“It's a massive problem to have to start replacing that and undoubtedly across the operators, it is going to cause 5G coverage to be lower than it would be otherwise,” added Barford.
The concerns come after the Telegraph revealed on Sunday that the UK could end the use of Huawei technology in its 5G network as soon as this year amid security concerns.
GCHQ is understood to have revised its previous assurance that the risks posed by the Chinese technology giant can be safely managed.
The Government is now preparing to publish a new review into the impacts of US sanctions on Huawei which is likely to lead to networks being forced to begin phasing out Huawei kit by Christmas. The move represents a dramatic about-turn by the Prime Minister after his decision in January to allow Huawei to build parts of the network.
It also aligns the UK with the US which has classified Huawei as a national security threat amid claims the company has “close ties to the Chinese government and military apparatus”. Huawei has said the decision was based on “innuendo and mistaken assumptions”.
Culture Secretary Oliver Dowden said US sanctions on Huawei will likely have a "significant impact" on the firm's reliability,
"This is an open market economy but I don't want to see our critical national infrastructure at risk of being in any way controlled by potentially hostile state vendors," Boris Johnson said last week. "So, we have to think very carefully about how to proceed now."
BT and Vodafone are believed to have since asked to be given until 2030 to remove Huawei's equipment from their existing 5G networks.
However, the government is facing pressure from Conservative rebel MPs who have pushed for stricter limits on Huawei kit. A source close to the group of 60 Tory rebels said they believed a proposed 2029 end date for removing kit was “unconscionable.”
BT has been seeking to challenge the dominance of Huawei over the industry by throwing its weight behind a new “open source” approach to buying essential network gear.
The concept borrows from open-source software, with telecom companies setting the parameters for the technology they want and outsourcing manufacturing to a variety of potential suppliers.
Supporters say the approach would reduce the power of the suppliers. It would also boost transparency and make it easier for the industry to identify cybersecurity vulnerabilities
Projects such as OpenRan, backed by BT, Vodafone and Facebook, may still be too early to become a major competitor to Huawei that’s capable of replacing any stripped-out equipment.
“I still feel that to plump for a big role with those more niche suppliers is a big decision for an operator given that this architecture is a little bit unproven and a little bit early,” said Kester Mann, a senior analyst at CCS Insight, “but I certainly think those conversations will have to start at some point.”
