After Boris Johnson raises security fears over Chinese tech firm, experts warn banning Huawei would drive up mobile phone bills
A ban stopping China’s Huawei from supplying kit for Britain’s 5G mobile network would cost firms more than £1billion and lead to price rises for customers, experts have warned.
The prospect of the telecoms giant being excluded was raised by Boris Johnson this week in response to American concerns that it could compromise UK-US intelligence sharing.
But experts said a U-turn – after BT, Vodafone and others have been allowed to deploy the equipment nationwide – would cost the companies hundreds of millions of pounds each and spark lengthy court battles.
Showing off: The prospect of the telecoms giant being excluded was raised by Boris Johnson
It is also feared the bills would be passed on to consumers, with one analyst saying the industry faced a charge ‘easily’ in excess of £1billion.
Both EE owner BT and Vodafone would face costs to strip out Huawei’s kit from their networks, sources said. Nearly two thirds of BT’s masts and antennas are understood to use Huawei kit, with Vodafone saying it uses the company for around one third.
Three, the smallest mobile provider, has relied solely on Huawei for its 5G equipment, and spent about £500m.
O2, owned by Spain’s Telefonica, has the least exposure with fewer than 1pc of its sites using Huawei, and would face virtually ‘no outstanding cost’ to remove it.
Matthew Howett, founder and analyst at Assembly Research, said: ‘Any ban on Huawei is going to mean very significant costs. You are talking about more than £1bn, easily. And that does not include the cost of labour to do the work, because there simply aren’t enough engineers to do it, as well as any delays or costs for getting access to land.
‘It will take time to be able to meet the sudden demand, so that will push up prices, and costs, even further.’
One technology and security analyst said: ‘You can bet they would try to pass on the costs to customers if they cannot get the Government to pay.’
It comes after a Government decision on whether Huawei’s kit should be allowed was delayed until after next week’s election.
A review was launched in the wake of claims the firm could be used for spying by the Chinese government, as well as concerns about its ‘shoddy’ cyber security.
Huawei has repeatedly denied its kit can be exploited for espionage. Its equipment has been kept away from the most sensitive parts of the networks known as the ‘core’.
Recent debate has focused on whether Huawei should be allowed to supply kit for 5G.
But the US has warned the nature of the technology means it is no longer safe for the company to be present in the network.
Another headache for mobile operators is that because 5G has been built on top of older Huawei kit, a decision to ban it now would also require older hardware to be ripped out and replaced.
Gareth Elliott, head of policy at industry body Mobile UK, said: ‘You would be taking out a competitive company from the supply chain. That is going to reduce the amount of choice and potentially have an impact on prices.’
UK signals intelligence agency GCHQ, which checks Huawei hardware believes any threat can still be contained. But US President Donald Trump has urged the UK and other European countries to ban the company.
And this week, at a Nato defence summit in London, Boris Johnson suggested he might do so.
One source at a major telecoms firm said it was impossible to predict what Johnson would do, adding: ‘It’s a little bit like trying to pin a tail on a donkey.’
Huawei said: ‘We’re confident that the UK Government will continue to take an objective, evidence-based approach to cyber security.’
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