Excluding Huawei from 5G could mean losses in its GDP of up to 85,000 million euros for Europe

The European Commission considers “absolutely justified” the exclusion, by some countries of the European Union, of Huawei and ZTE from the deployment of their 5G networks.

This is stated in a statement released after the press conference by the Commissioner for the Internal Market and in charge of Telecommunications, Thierry Breton, who also urged the rest of the countries that have not yet done so to take measures in the same direction, for reasons of national security.

However, Limiting competition in the field of 5G would have a significant impact, in addition to a technical level, for the economy in Europeas highlighted by a report by Oxford Economics, which quantifies between 12,000 million and 85,000 million euros, depending on the scenario, the losses in GDP by 2035 for the group of 31 European countries analyzed by the consultancy.

Specifically, For European operators, the restriction of key providers in 5G infrastructures, among which companies such as Huawei and ZTE are included, would mean an increase in their expenses in the implementation of their fifth generation networks of between 1,400 million and 4,500 million euros per year, which represents an increase of up to 30%, approximately. This impact does not include the significant costs for the operators derived from having to replace the equipment manufactured by the providers on which the restrictions were imposed on their networks.

Along with the financial consequences, the Oxford Economics report also highlights the slowdown in innovation and delays in network deployment that would imply a restriction of competition in the 5G field, which would also limit access to these technologies to millions of people in the coming years.

Huawei disagrees with the commission

Huawei has expressed, through a statement, its firm opposition and disagreement with the comments made by the representatives of the European Commission, stating that “are not based on a verified, transparent, objective and technical assessment of 5G networks”.

Although the company claims to understand the concern of the European Commission to protect cybersecurity in the EU, it also warns about the serious economic and social risks that they would have “restrictions or exclusions based on discriminatory judgments” and that, in addition, “would hinder innovation and distort the EU market”. To do this, he alludes to the previously mentioned Oxford Economics report, which shows that “excluding Huawei could increase investment costs in 5G by up to tens of billions of euros, and will have to be paid for by European consumers”.

Huawei recalls that cybersecurity is its main priority and gives an example of the launch of a Cybersecurity Transparency Center in Brussels

In its statement, Huawei also notes that “publicly rating an individual entity as a high supplier without legal basis is contrary to the principles of free trade”. In addition, it considers it important to underline that “the discriminatory evaluation of the high-risk supplier will not be applied to any supplier without a justified procedure and an adequate hearing.” In this sense, he affirms that Huawei, as an economic actor in the EU, “has procedural and substantive rights, and must be protected by the laws of the EU and of the Member States, as well as by their international commitments.”

At the same time, Huawei recalls that cybersecurity is its top priority and gives the example of setting up a Cybersecurity Transparency Center in Brussels. “This center is open to customers and independent third-party testing organizations. They are encouraged to conduct fair, objective, and independent security testing and verification in accordance with industry-recognized cybersecurity standards and best practices. We maintain our commitment to offer certified and trusted products and services on a global scale, connecting millions of Europeans”, explains the company.