Huawei equipment replacement cost could reach €40B, GSMA says
GSMA Intelligence says EU rip-and-replace rules for Huawei and ZTE kit could cost operators €30B to €40B before equipment inflation.
By Dominic Okoye · Staff Writer
· 3 min read
GSMA Intelligence says the Huawei equipment replacement cost facing European telecom operators could run from €30 billion to €40 billion if the EU requires carriers to remove gear from designated high-risk vendors. The warning matters for the sector because the research arm of the GSMA says the bill would cover mobile, fixed and transport networks, with knock-on effects for capex, customer pricing and 5G and 6G buildouts.
The estimate responds to the European Commission’s proposed Cybersecurity Act 2 framework, which includes provisions requiring member states to remove and replace critical telecom equipment supplied by vendors classed as high risk. The Register reported earlier this year that the rules would apply to critical infrastructure. In EU policy discussions, that category has been associated with China-based suppliers including Huawei and ZTE, which then-European Commissioner Thierry Breton identified in a speech several years ago.
GSMA Intelligence said policymakers are putting more weight on security and resilience because digital infrastructure now underpins a larger share of economic activity. The trade body’s concern is the size and speed of the proposed replacement effort. Mobile operators would have three years to remove targeted equipment, while timelines for other networks and assets could vary.
How much would replacing Huawei equipment cost?
GSMA Intelligence based its €30 billion to €40 billion estimate on a survey of seven EU operator groups. At the midpoint of €35 billion, the report puts mobile network replacement at €19 billion, fixed infrastructure at €5 billion and transport networks, including optical backbones and subsea cables, at €11 billion.
That figure is the direct rip-and-replace cost, not the full economic exposure GSMA Intelligence describes. The report argues that excluding high-risk vendors would also reduce competition in the telecom equipment market, where the mobile network equipment segment is already concentrated and Huawei holds a sizable position.
Using a method GSMA Intelligence says is favored by the European Commission, based on diversion ratios and supplier margin data, the group estimates that mobile network equipment prices could rise 24%. It projects fixed network gear could become as much as 19% more expensive, while transport equipment could rise by 10%.
On GSMA Intelligence’s assumptions for investment between 2027 and 2030, those higher equipment prices would add about €8.5 billion in incremental costs for network operators. The report says carriers would likely respond by raising access charges for customers, reducing network upgrade and service improvement spending, or doing both.
What is at stake for EU telecom investment?
The telecom industry’s case is that security policy has a cost beyond procurement. GSMA Intelligence argues that slower or more expensive 5G and 6G deployment would make it harder for the EU to hit its Digital Decade 2030 targets, because network quality affects productivity, innovation and broader economic growth.
The report cites a KPMG study that estimated potential cumulative economic losses of up to €370 billion across the EU through 2030. That figure should be read with its sponsorship context: the study was produced in collaboration with the China Chamber of Commerce to the EU.
The UK is the nearest example cited in the debate. Britain ordered operators to remove Huawei equipment from 5G networks after pressure from the first Trump administration, which threatened consequences for intelligence sharing if the UK did not comply. The Register has reported that the decision has been linked to weaker 5G performance and service quality, as operators spent money on replacement rather than faster rollout.
The funding question remains unresolved in the policy fight described by GSMA Intelligence. The proposed rules would shift a large replacement burden onto operators at the same time they are expected to keep investing in next-generation networks.
This story draws on original reporting from The Register.
