Huawei 5G ban could cost telcos up to $3bn

The decision to ban Huawei from Australia’s 5G rollouts will increase operators’ deployment costs by up to $3 billion over the next 10 years, according to a report commissioned by the vendor from Oxford Economics.

Excluding Huawei from providing equipment for the rollouts will increase the cost of deploying 5G over the next 10 years by nearly 30%, or $300 million annually, the report predicts — and this cost increase will inevitably be borne by consumers.

Oxford Economics also predicts that Huawei’s 5G ban will mean up to 3 million Australians — mostly in rural and regional Australia — will miss out on getting access to 5G by 2023.

According to the report, failing to deliver 5G nationwide by 2035 would cost the Australian economy some US$8.2 billion ($11.9 billion) in lost GDP gains.

“The arrival of 5G will unlock new income streams for businesses in all sectors of the economy, and increase their productivity levels, through enhanced capabilities including higher data speeds, lower latency, and network slicing….this will allow the development of ‘mission critical’ applications,” Oxford Economics associate director Henry Worthington said.

“However, it is broadly agreed that restricting such a significant player from bidding for 5G contracts will lead to higher prices, rollout delays and hence a slower diffusion of associated technological innovation. For Australia, the resulting loss in productivity has significant economic consequences.”

Huawei Australia Director of Corporate Affairs Jeremy Mitchell said the findings validate what the company has been saying since then-Prime Minister Malcolm Turnbull made the decision to ban Huawei from Australian 5G rollouts in August 2018.

“The decision will only end up hurting ordinary Australians, especially hitting hardest those in regional Australia. Australian broadband consumers are already saddled with the huge costs of paying for the $151 billion NBN, so the last thing they need are substantially higher costs on building out 5G,” he said.

“Regional and rural Australia has already been saddled with the hugely problematic NBN Satellite and Fixed Wireless services that normally deliver low speeds in peak-times — they can’t be let down on 5G too.”

Last week, following an interview with Turnbull on BBC Radio, Mitchell took the former Prime Minister to task accusing him of “continu[ing] to rely on factually incorrect information when commenting on his government’s decision to exclude Huawei from delivering 5G in Australia”.

Mitchell said real-world 5G deployments have now thoroughly disproven Turnbull’s justification for the ban — that it is not possible to functionally separate 5G core and radio access network equipment.

“Indeed, two separate UK parliamentary committees have found that the core and radio access networks can and will be split in 5G and this is now being done by operators all over the world — including right now in the UK,” he said.

“Huawei has supplied Australia with world-leading 4G technology safely and securely. In our over 15 years in Australia we have never had any cybersecurity issues... Huawei has worked closely with security agencies around the world to help find solutions on risk mitigation on 5G and are always willing to do so with Australian security agencies.”

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