Phone carriers see $62b hit if Chinese banned from 5G

Bloomberg

Excluding China’s Huawei Technologies Co and ZTE Corp from the next generation of mobile networks would lumber European phone companies with 55 billion euros ($62 billion) in extra costs, the wireless industry’s main lobby group said.
A global ban advocated by US President Donald Trump would also delay the rollout of the high-speed 5G networks by at least 18 months and deprive the European Union of around 45 billion euros in productivity growth, according to a preliminary report drafted by the GSMA trade association and seen by Bloomberg.
“The need to replace network equipment and the capacity constraints on the remaining mobile equipment vendors would disrupt current rollout plans,” the report said. “Such a delay would widen the gap in 5G penetration between the EU and the US by more than 15 percentage points by 2025.”
US efforts to isolate the Chinese vendors amid a trade conflict with Beijing have thrown the global telecom industry’s network upgrade plans into confusion as Huawei is one of the biggest suppliers of the core infrastructure and radio access equipment and the second-largest producer of smartphones behind Samsung Electronics Co.
Some US allies have already followed Washington’s lead in excluding Huawei, heeding warnings that its equipment is vulnerable to hacking and espionage by the Chinese state, which the company denies.
Outright bans on Huawei appear unlikely in Europe, the region it relies on most for growth outside China, after Germany, France and Britain signalled more limited restrictions and tighter oversight of their networks.
“We need to have competition. We need to have strong companies that are able to invest in research and development,” Agnes Pannier-Runacher, a junior economy minister in France’s government, told reporters at a 5G event near Paris.
The GSMA report was written before President Trump opened a new front against the Shenzhen-based vendor by restricting its access to Google’s Android operating system for its 5G smartphones, potentially disrupting their ability to function or access popular apps.

China issues 5G licenses
Bloomberg

China approved four operating licenses for 5G networks, setting the stage for the super-fast telecommunications system amid simmering tensions with the US over technology and trade.
The country’s three state-owned wireless carriers and China Broadcasting Network Corp were granted licences for full commercial deployment, the Ministry of Industry and Information Technology said.
The operators, China Mobile Ltd, China Telecom Corp and China Unicom Hong Kong Ltd, have been testing the technology in several cities including Beijing and Shenzhen.
The Chinese government’s accelerating 5G licensing is probably aimed at ensuring carriers do not weaken plans to build as many as 110,000 5G base stations, assuming Huawei can deliver the necessary equipment using component inventories, wrote Edison Lee and Timothy Chau, analysts at Jefferies, in a note to clients.