UK risks £6.8bn investment over Huawei 5G controversy

Restricting the operation of Huawei could cost the United Kingdom about £6.8bn, and could also delay the country’s rollout of the controversial 5G network up to 24 months, a MobileUK report has said.

This coming after reports by Guardian and Telegraph alleged plans by the UK government to phase out operations of Huawei by 2023, despite London’s approval in January.

According to London’s own estimates, a delay in rolling out 5G would cost the UK from £4.5bn to £6.8bn. Further losses of inward foreign direct investment and productivity would result from “stagnation of digital infrastructure”, the report added.

Reducing Huawei’s 5G equipment to the government’s targeted 35 percent would cost Vodafone group roughly £178m (€200m) and “take around five years to implement”, chief executive Nick Read said in a statement in April.

But BT, the UK’s largest carrier and owner of mobile and broadband provider EE, said the 35 percent target would set back the company around £500m over five years to meet Downing Street’s target.

“We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around £500m over the next five years,” BT chief executive Philip Jansen said in a statement in January.

According to UK regulator Ofcom, Huawei accounts for 44 percent of Britain’s equipment in the nation’s superfast full-fibre.

But around 66,000 of the country’s VDSL2 Fibre-to-the-Cabinet (FTTC) boxes, or roadside cabinets delivering fibre broadband to homes and offices, use Huawei equipment, ThinkBroadband added.

According to news outlet ISPReview, the UK’s largest suppliers of cabinet equipment capable of handling multiple home and business connections are Huawei and Tel Aviv’s Elastic Network Company (ECI).

Replacing ECI cabinets would be expensive and complicated “particularly now that they’ve moved on with a different approach via [gigafast] and Fibre-to-the-Premises (FTTP) technology”, the article said.

UK’s U-turn is coming after Washington extended a ban on US companies doing business with Huawei, ZTE and over 70 Chinese tech firms placed on an Entity List in May last year, citing national security concerns and despite granting licences.

Washington has repeatedly launched accusations against Beijing, stating that Huawei’s equipment could be used to spy for the Chinese government, which the latter and Huawei have repeatedly and strongly denied.

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To date, Washington has not presented any evidence to back its claims, which Huawei and Chinese officials have urged US officials to provide.