Europe's China telecoms gear ban would cost industry $3.5 billion: report

TALLINN (Reuters) – Replacing Chinese telecoms equipment would cost European telecom operators about $3.5 billion, a report by industry research firm Strand Consult predicted on Friday, far lower than the figure a lobby group came up with.

Industry lobby group GSMA, backed by blacklisted Chinese firm Huawei, predicted a cost of $62 billion.

The world’s largest telecom equipment maker Huawei has been put on a U.S. blacklist after Washington said its equipment could be used for spying, which the company denies.

U.S. firms are barred from using some of the firm’s equipment and Washington is urging European countries to follow suit.

Copenhagen-based Strand Consult said examples from the United States and Australia show that restricting Huawei [HWT.UL] and another Chinese firm ZTE (000063.SZ) from networks has not increased prices or delayed roll-outs of new 5G mobile networks.

“Mobile operators must upgrade their equipment for technological reasons, regardless of whether Huawei and ZTE is in the market or not,” Strand said in the report.

“Restrictions did not result in price increases in the U.S. or Australia and are unlikely to negatively impact Europe because Huawei and ZTE’s footprint in the Europe is but 6% of the world’s total outlay,” Strand said.

Huawei is battling with Nordic firms Ericsson (ERICb.ST) and Nokia (NOKIA.HE) for orders of next generation mobile networks using 5G technology.

The $62 billion estimate emerged from a report by telecoms lobby group GSMA, which represents the interests of 750 mobile operators. Huawei is one of the key supporters of that lobby group, industry sources said.