The report, published by the GSMA, a global telecom industry association, estimated that replacing Huawei equipment across Europe could cost about €35 billion ($39.8 billion). It argued that the financial burden of removing so-called high-risk vendors (HRVs) could be so substantial that some countries may prefer to maintain their reliance on existing suppliers rather than undertake a costly transition.
However, the report has attracted criticism over questions surrounding its independence, partly because Huawei is a major participant in GSMA activities and a prominent exhibitor at the annual Mobile World Congress (MWC) Barcelona event organised by the association.
Huawei has maintained that it played no role in preparing the report and has rejected suggestions that it poses a security threat to European networks.
The controversy comes after the European Union renewed pressure on member states to reduce dependence on Chinese telecom suppliers. The EU’s 5G Toolbox, introduced as a framework for managing cybersecurity risks, encouraged countries to assess and restrict the involvement of high-risk vendors in critical infrastructure.
The European Commission has also proposed possible amendments to cybersecurity rules that could require member states to remove certain suppliers within a defined timeframe and impose penalties for non-compliance.
Security Concerns Remain at the Centre of Debate
The central concern surrounding Huawei and other high-risk vendors is the possibility that telecom equipment could contain vulnerabilities, including software backdoors that could allow unauthorised access to sensitive information or critical systems.
Security officials have expressed concerns that such vulnerabilities could potentially be exploited for espionage or sabotage, particularly amid rising tensions between China and Western nations, Russia’s ongoing war in Ukraine and increasing discussions about using civilian 5G networks for defence-related communications.
However, there has been no publicly confirmed evidence that Huawei has used its equipment for espionage or cyber sabotage.
A former source within Britain’s BT Group said the company had never found evidence of alleged backdoors or malware despite extensive security checks.
Huawei has repeatedly denied allegations that it could be controlled by the Chinese government, arguing that its employee ownership structure and commercial interests would make such actions damaging to its global business.
The company’s founder, Ren Zhengfei, has previously stated that Huawei would refuse any demand to engage in spying activities, although critics remain sceptical about the extent of corporate independence in China.
Questions Over the Cost of Removing Huawei
While the GSMA report highlights the financial challenge of replacing Huawei equipment, analysts have questioned whether its cost estimates accurately reflect the likely expense.
The association’s estimate of €35 billion includes the replacement of both mobile and fixed network infrastructure, while European regulators have primarily focused their concerns on 5G networks.
When limited to mobile networks, the GSMA estimates that the cost would fall to about €19 billion ($21.6 billion).
Critics argue that even this figure may be inflated because some calculations rely heavily on information from telecom operators that have a financial interest in demonstrating the difficulty and expense of removing Huawei equipment.
In Britain, for example, BT Group previously estimated that replacing Huawei equipment from its network would cost about £500 million ($664 million) over several years. The company has since completed the removal of Huawei 5G equipment without major service disruptions.
Analyst firm Strand Consult estimates that much of the remaining Huawei replacement challenge is concentrated in large European markets, particularly Germany, Italy and Spain.
In Germany, where Huawei reportedly accounts for a significant portion of the 5G infrastructure, replacing equipment could cost less than €2.5 billion ($2.8 billion), according to estimates from Strand Consult and similar assessments by Barclays.
The European Commission has estimated that removing Huawei equipment could cost between €3 billion ($3.4 billion) and €4 billion ($4.6 billion) annually over three years, although the GSMA has questioned the methodology behind those figures.
Impact on European Telecom Suppliers
The Huawei debate also has major implications for European equipment manufacturers such as Ericsson and Nokia, which could benefit from contracts if Huawei is excluded from European networks.
Nokia Chief Executive Justin Hotard has argued that restrictions on Huawei should be considered because European companies face unequal competition in China, where domestic suppliers dominate the telecom market.
Ericsson and Nokia have seen their combined presence in China shrink significantly in recent years, while Chinese vendors have strengthened their position in their home market.
Industry executives argue that Huawei’s access to China's enormous domestic market gives it advantages in scale and pricing that European companies cannot easily match.
Samsung Networks executive Woojune Kim previously raised similar concerns, saying Huawei’s pricing had sometimes been difficult for competitors to match while remaining profitable.
He said, "We have frequently seen bids that do not seem to make sense in the pricing. No company beholden to shareholders and to make profits could offer that sort of bid."
Europe’s Broader Technology Challenge
Beyond Huawei, the dispute highlights wider concerns about the competitiveness of Europe’s telecommunications sector.
The European market has experienced slow growth, intense price competition and declining revenues despite increasing investment requirements for advanced networks.
Some industry observers warn that continued pressure on European suppliers could weaken companies such as Nokia and Ericsson, leaving Europe with fewer strategic technology players.
Nokia, in particular, has undergone major restructuring efforts and significant job cuts in recent years as it faces pressure in the global telecom equipment market.
Supporters of stricter Huawei restrictions argue that Europe must consider long-term strategic resilience rather than focusing only on short-term costs.
Critics, however, warn that forcing operators to replace equipment could increase expenses for consumers and slow network development.
The debate reflects a difficult balance for European policymakers: protecting critical infrastructure from potential security threats while ensuring telecom companies remain competitive, affordable and technologically advanced.