Huawei claims UK faces £18.2bn hit without its 5G tech

Banning and removing Huawei from the UK’s 5G networks by 2027 risks severely delaying operators’ 5G roll-out plans, potentially affecting the UK economy by £18.2 billion.

The Chinese technology giant commissioned regulatory analysis firm Assembly to conduct a report into the UK government's decision to remove it from the list of approved suppliers for the network roll-out.

It stated that in the last 12 months, UK mobile operators have made significant progress in deploying 5G infrastructure, putting the country in a strong position to reap the future economic benefits. "However, as a result of continued US pressure and latest sanctions, this deployment will slow in future, impacting industrial efficiency, global competitiveness as well as, the associated economic benefits of being a global leader in 5G."

In January, the government announced that it would allow Huawei to supply infrastructure to ‘non-core’ parts of the 5G network, with a limit on its reach of 35 per cent - with the prime minister facing a back bench rebellion over the decision.

By the middle of July, the government changed course, banning UK telecommunications companies from buying new Huawei 5G equipment, with a full removal of Huawei equipment from networks by 2027. Oliver Dowden, the secretary of state for digital, culture, media and sport, said at the time that the move would delay the rollout of high speed 5G networks by one year.

Huawei has always strenuously denied that its equipment could act as a 'backdoor' to the Chinese state, but warnings to the contrary from both UK and US intelligence agencies appeared to have swung the decision against the company.

The British Computer Society and Chartered Institute for IT surveyed its 2,962 members at the end of July, finding that over a quarter (28 per cent) did still agree with the Chinese telecoms firms’ warning that the UK’s tech development will stall without it - with 19 per cent remaining neutral.

However, 53 per cent of IT professionals do not believe Huawei’s claim that the UK’s decision to ban the tech giant from its 5G network infrastructure will 'move Britain into the digital slow lane, push up bills and deepen the digital divide'.

The Huawei-commissioned report highlighted the Department for Culture, Media and Sport's conclusion that should the UK not maintain global leadership in 5G, it will miss the opportunity to fully realise £173 billion of incremental GDP over the next 10 years.

The report stated that of the suggested £18.2 billion economic impact - a result of the three-year delay - about £10 billion would be from lost productivity. Under a scenario where the UK is a global 5G leader, the mobile sector would miss out on the opportunity to generate about £4.7 billion and related industries would lose about £2 billion. The economy at large would miss benefits estimated around £1.5 billion.

Matthew Howett, principal analyst and founder of Assembly, said: “As a result of further restrictions on Huawei in the US, the UK mobile operators are set to incur billions of pounds worth of cost stripping out equipment form their networks.

"This report reaffirms there is also an untold cost in terms of the economy and impact on productivity a delayed 5G roll out will have, the scale of which the UK can ill afford given the current economic circumstances.”

Victor Zhang, vice president of Huawei, said: “This new research shows how the US administration has directly impacted Britain’s economy, ending the UK’s leadership in 5G, holding the country back from realising its full potential for years to come.

"Our priority at Huawei remains to support our customers in delivering and helping to build a better connected UK - this independent research, shows why we would urge the government to reconsider its decision."

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