Banning Huawei may lead to significant impact on UK economy: report

LONDON -- Banning and removing Huawei equipment from Britain's 5G networks by 2027 risks severely delaying operators' 5G roll-out plans, adversely affecting its economy by 18.2 billion pounds ($23.7 billion), according to an independent report released Wednesday by Assembly, a London-based analyst firm.

In July, the British government drastically reversed its policy on Huawei by announcing that buying new Huawei 5G equipment will be banned after Dec 31, 2020 and all Huawei equipment will be removed from 5G networks by the end of 2027.

Britain's Digital Secretary Oliver Dowden admitted that the decision will lead to "a cumulative delay to 5G rollout of two to three years and costs of up to 2 billion pounds ($2.5 billion)" in the country.

The removal of Huawei equipment sooner than 2027 would lead to a further delay to roll-out and higher cost to the British economy, said the new report. The report, commissioned by Huawei, builds upon the government's own expectation of a 3-year delay to 5G roll-out.

Global leadership is important so that Britain can take early advantage of the potential for 5G to create new opportunities for Britain's businesses at home and encourage inward investment -- both of which contribute to the creation of a world-leading digital economy, the report said.

Of the 18.2-billion-pound ($23.7-billion) economic impact, a result of the 3-year delay, about 10 billion pounds ($13 billion) of productivity benefits would be lost entirely, according to Assembly's analysis.

Under a scenario where Britain is a global 5G leader, the mobile sector would miss out on the opportunity to generate about 4.7 billion pounds ($6.1 billion) and related industries would lose about 2 billion pounds ($2.6 billion), the report also said.

"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," said Matthew Howett, principal analyst and founder of Assembly.

"Our priority at Huawei remains to support our customers in delivering and helping to build a better connected UK. This independent research, shows why we would urge the government to reconsider its decision," said Victor Zhang, vice-president of Huawei.