Banning high-risk vendors (HRVs) from European telecom networks will cost operators 30 billion to 40 billion euros. The revised Cybersecurity Act (CSA2) mandates the exclusion of HRVs (Huawei and ZTE) to strengthen network security, but this comes with a massive price tag in replacement costs.
This is according to a study by industry association GSMA. The study focuses on the CSA2, through which Brussels aims to make the exclusion of HRVs legally binding. The proposal requires operators to remove equipment from designated suppliers from their 5G core and RAN networks within three years.
GSMA collected data from seven operator groups that together represent nearly half of the EU market. The result: a central estimate of 35 billion euros in rip-and-replace costs.
Where the money is going
The largest portion of the costs is in mobile networks: 16 to 22 billion euros. This is due to heavy reliance on HRV equipment and the cost of replacing base stations, for example. Fixed networks will cost up to 5 billion euros, and transport networks 9 to 12 billion euros.
These amounts cover only direct replacement. Depreciation of existing equipment, service disruptions, and capacity issues are not included. According to the researchers, replacement RAN equipment also consumes more energy than current hardware.
Less competition, higher prices
Excluding suppliers reduces the number of providers, thereby increasing market concentration. The GSMA expects price increases of up to 24 percent for mobile equipment, 19 percent for fixed networks, and 10 percent for transport. In segments such as optical connections, only one major player may remain, such as Nokia.
These higher prices will lead to an estimated additional investment burden of 8.5 billion euros over 2027-2030. Over the period through 2035, this could rise to approximately 24 billion euros.
Europe is already grappling with an investment gap: 475 billion euros are needed for top-tier connectivity, while only 270 billion euros are expected to be available. According to the study, the additional costs will further widen that gap and slow down the rollout of standalone 5G and fiber-optics.
Tip: Huawei is focusing on AI and the green transition in Europe