Huawei ban could cost Europe €40bn and drive network equipment prices up 43%

European telecom operators could face a bill of up to €40 billion to strip Chinese-made equipment from their networks, while two Nordic companies would end up controlling almost the entire market, a new industry report has found.

A new industry report says Europe’s telecom operators are at the risk of losing up to €40 billion for removing Chinese made equipment from their networks. The market will be handed over to Nordic companies having a monopoly over the entire industry.

The new estimates, released Wednesday, are more than three times what Brussels had expected to roughly be €10 billion to €13 billion in total. The report itself was commissioned by seven major European operator groups including Deutsche Telekom, Vodafone and Orange. It was prepared by GSMA Intelligence, the research arm of the global telecoms industry body GSMA.

The report follows European Commission move of making changes to its Cybersecurity Act. The changes would legally require the member states to strip all the equipment from the countries deemed high risk. China’s Huawei and ZTE are the main targets as reported by Cryptopolitan previously.

The study says that the removal cost will be “one of the most significant structural interventions in the European telecoms sector in decades.”

Brussels got the numbers wrong

The total expense is divided between new mobile base stations and related hardware costing between €16 billion and €22 billion and transport network equipment, which moves data between sites, would add another €9 billion to €12 billion. Moreover fixed broadband gear including fiber access equipment accounts for a further €5 billion.

The Commission looked only at mobile networks, but the GSMA study also covered fixed broadband and transport networks, drawing on internal cost data from operators serving close to half of all mobile subscribers in the EU.

The report also highlighted that pushing out Chinese suppliers would sharply shrink competition, with no new players expected to fill the gap. Due to this the mobile equipment prices will shoot up by 24 percent, fixed broadband gear by 19 percent and transport network equipment by 10 percent.

Meanwhile if most of Huawei and ZTE business goes to the single biggest remaining supplier, mobile equipment costs could jump by as much as 43 percent. Those price increases would add around €8.5 billion to operator investment plans between 2027 and 2030, and roughly €24 billion more by 2035.

Huawei currently holds around a quarter of the EU’s mobile equipment market, a share that climbs to about a third when ZTE is included. In fixed networks, the two Chinese companies together account for close to 40 percent.

Removing them would leave Sweden’s Ericsson and Finland’s Nokia as the only serious players. Ericsson’s mobile market share would rise to nearly 60 percent, with the two firms together holding around 96 percent. Nokia’s share of fixed broadband would climb from 30 percent to close to 50 percent.

Higher costs, the report said, would push operators to slow or cancel network upgrades, deepening Europe’s existing €205 billion digital infrastructure shortfall.

A separate study published in May by the China Chamber of Commerce to the EU and consulting firm KPMG estimated the broader economic damage from the proposed rules at €367.8 billion over five years, including €57.4 billion for the telecoms sector.

The findings land amid growing resistance inside the bloc

Germany and Spain are leading pushback from member states, with officials from both countries arguing that a Brussels-level ban risks triggering retaliation from Beijing and driving up the cost of building AI infrastructure across Europe.

China’s Foreign Ministry has made that threat explicit. “If Chinese companies are subjected to discriminatory treatment as a result, China will take resolute measures in accordance with relevant regulations to safeguard the legitimate rights and interests of Chinese companies,” a ministry statement said.

German Economy Minister Katherina Reiche, speaking to reporters in Beijing on Wednesday, summed up the bind her country finds itself in. “We need to counter unfair competition, for example, in steel and ferroalloys, with appropriate measures, while at the same time ensuring that our companies can continue to export,” she said.

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