US wants two more years for Huawei as GSMA puts costs at €55bn

11 June 2019 | Alan Burkitt-Gray

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The head of a White House agency has asked for a two-year delay in implementing a ban on Huawei by US government contractors.

At the same time the trade association representing the world’s mobile industry believes the ban on Huawei will add €55 billion to the cost of building 5G networks in Europe.

Russel Vought, acting director of the Office of Management and Budget, a White House agency, has written to US vice president Mike Pence calling for a delay to the ban on Huawei and ZTE imposed by Donald Trump.

The ban applies to government contractors and organisations receiving federal grants. At the moment the ban, imposed under the National Defense Authorization Act (NDAA), comes into operation in 2021. But Vought wants two years extra, to give organisations extra time to adjust. In particular rural telecoms companies may struggle to find alternations due to “the limited number of market options”.

Jacob Wood of the OMB told the Wall Street Journal: “This is about ensuring that companies who do business with the US government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA.”

Meanwhile the Reuters news agency is reporting that the GSMA, which represents most mobile operators around the world, believes a band on Huawei and ZTE would increase the cost of 5G in Europe.

“Half of this [additional cost] would be due to European operators being impacted by higher input costs following significant loss of competition in the mobile equipment market,” the report said, according to the news agency.

“Additionally, operators would need to replace existing infrastructure before implementing 5G upgrades.”