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£6.8bn potential risk to UK economy if use of Huawei for 5G rollout is restricted, report finds

Councils and Connectivity Report
  • A partial to full restriction on Huawei in the telecoms supply chain could result in an 18 – 24 month delay to the widespread availability of 5G in the UK
  • A delay to launch will result in the UK failing to be a world leader in 5G – something that has been central to the UK government’s 5G strategy
  • Using the government’s own estimates on the benefits of 5G, the cost to the UK economy of a delay in rollout is calculated at between £4.5bn and £6.8bn
  • As well as the measurable financial impact, the UK will also suffer in terms of lower inward investment and lost productivity gains through stagnation of digital infrastructure

According to an independent report from Assembly, commissioned by Mobile UK, a restriction placed on Huawei in the telecom supply chain could delay a full 5G launch by between 18 and 24 months and cost the UK economy between £4.5bn and £6.8bn.

The new analysis, based on the government’s own projections, and compiled with the co-operation of UK mobile operators, found that a delay to 5G rollout while operators make alternative procurement arrangements with other suppliers may seriously threaten the UK’s aspiration to be a world leader in 5G, something that has been central to the UK government’s industrial strategy since 2016.

The importance of early 5G leadership to realise the economic benefits of the technology can’t be understated. If any restriction were to be imposed on Huawei, many of the benefits associated with 5G leadership could be lost for good, not simply delayed as a result – these include significant productivity gains that stand to benefit the UK’s global economic standing.

Competition in the supply chain has so far been good for technological progress and meant that the UK has benefited from cost effective rollout and strong mobile coverage.

The research shows that, across a number of industries which are expected to take advantage of 5G connectivity, new sources of growth and innovation may be delayed with further consequences for consumers and a damaging effect on UK businesses.

The full report is available here.