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Huawei 5G removal to cost UK economy £18.2bn

Paul Lipscombe
September 9, 2020

Assembly Research predict the UK’s global leadership position is on track to disappear through 2022 and 2023

The removal and banning of Huawei from the UK’s 5G networks by 2027 could cost the UK economy up to £18.2bn.

That is according to a report by analyst firm Assembly Research, which has been commissioned by Huawei.

It comes in the wake of the government’s decision in July to remove all Huawei equipment from the UK’s 5G networks by 2027.

This is expected to delay the UK’s overall 5G deployment by three years and impact some of the UK’s operators.

According to the report, the UK is expected to lose its current 5G competitive advantage and leadership position through 2022 and 2023.

Last year all four major network operators launched 5G services, and have since expanded their respective rollouts across the UK.

Missing out

However due to persistent US pressure and further sanctions leading to a phased removal of Huawei equipment, deployment will stall.

The report backs up the DCMS’ conclusion that the move will set the UK back financially.

It is estimated that in the next 10 years up to 2030 that the UK could generate up to £173 billion in incremental GDP from 5G.

But it is now expected to set the country back £18.2 billion as a three-year delay is anticipated.

Of this amount, about £10 billion of productivity benefits would be lost completely.

Assembly founder and principle analyst Matthew Howett said: “As a result of further restrictions on Huawei in the US, the UK mobile operators are set to incur billions of pounds worth of cost stripping out equipment form their networks.

“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.”

Huawei vice president Victor Zhang has urged the UK government to reconsider its decision.

“This new research shows how the US administration has directly impacted Britain’s economy, ending the UK’s leadership in 5G, holding the country back from realising its full potential for years to come.”

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