Huawei Ban Could Hit UK Economy with £18 Billion Loss

Huawei Ban Could Hit UK Economy with £18 Billion Loss
Depositphotos

An order to remove Huawei equipment from 5G networks by 2027 could take an £18.2 billion hit on UK economy. The decision is likely to also result in further delays to deployments, according to a report commissioned by Huawei.

The report, made by market research company Assembly, examined the consequences of a UK government plan to ban the use of Huawei 5G equipment and require operators to remove existing kit from their networks by 2027. The UK government previously stated it expects delays of up to three years in 5G deployments as a result of the move, which was prompted by tightened US restrictions on the vendor.

Assembly considered the government’s estimation and built on it, finding the removal of Huawei equipment sooner than 2027 would lead to a further delays to rollout and higher cost to both the UK economy and operators. In the last 12 months, UK operators made significant progress in deploying 5G, putting the country in a strong position to reap the future economic benefits, the company added. However, it expects deployment to slow in the future, impacting global competitiveness and the associated economic benefits of being a leader in 5G.

The expected three-year delay would result in about £10 billion of productivity benefits being lost entirely. Furthermore, 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 at around £1.5 billion.

"The result of further restrictions on Huawei in the US will result in UK operators incurring billions of pounds-worth of costs," said principal analyst and founder of Assembly Matthew Howett. “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,“ added Howett.