Oxford Economics has compiled a study on the costs of excluding Huawei from some European networks. The result is that Huawei’s exclusion would cost billions of euros to the European market.
Oxford Economics’ study
The cost of excluding of Huawei from the european market
The British institute of Analysis and Research Oxford Economics has made a study on the costs resulting from the exclusion of Huawei from some European networks.
Depending by the scenario, those costs could amount to over 3 billion euros every year.
This could determine a 19% increase of the annual costs. That means 479 millions euros for the Germany and 3 millions for the Iceland.
A delay on the introduction of the 5G could represent a slowdown of the technological innovation and a reduction in the economic growth.
In an intermediate scenario, this could lead to a reduction of the national GDP in France and Iceland that would lose 7.3 billions and 7.3 millions euros within 2035. Meanwhile, keeping the current costs, the GDP’s decrease is estimated around 40 billions euros.
In its study “Limiting competition in 5G network infrastructures in Europe”, Oxford Economics underlines the increasingly important role that digital infrastructures play in sustaining the economy in a post-pandemic recovery phase:
- An higher connection speed obtained thanks of 5G, and the new uses of this technology that are essential to increase the productivity levels, crashed due the COVID-19.
- during the apex of the crisis, the telecommunications networks kept active the sanitary, scholastic and emergency services. They permitted the companies to operate and stay with friends and families.
- the introduction of 5G can help to stimolate the economic ricovery in the short term.
An efficient telecommunications market in the UE
The exclusion of Huawei would have dramatic consequences for Europe in terms of long-term economic losses.
Restrictions of the competition usually lead to prices increasing, and preventing an important provider from competing in the 5G network by limiting competition would result in higher costs. And, consequently, a delay in the implementation of 5G.
That would result in a slowdown of the technological developement and innovation, a reduction of families incomes and a slower recovery from the recession.
It is estimated that over 56 millions people would have a delayed access between now and 2023.
5G will stimulate the economic recovery after the widespread
5G offers a lot of opportunities to countries that facilitate his diffusion.
As social distancing has become the norm, digital infrastructures plays an increasingly important role in sustaining a nation’s economy.
The incredible speed of 5G and the large application fields of the new mobile connection generation will help to increase the productivity levels of the countries during the recovery phase from the economic crisis. The realization of the 5G network can also represent an incentive for a recovery in a short time. However, the recession caused by the pandemic will cause a delay in the implementation of 5G. By reducing the benefits that could have been obtained from the opportunities that this technology offers, in a scenario of uncertainty and slow economic growth that has also lead telecommunications operators to reduce their investments.