High risk vendor rip out could cost EU up to β¬40B
GSMA Intelligence estimated the cost of replacing equipment made by so-called high risk vendors (HRV) from telecoms networks in Europe will cost between β¬30 billion to β¬40 billion, based on data from operators representing almost half of the market.
In the study, independently commissioned and sponsored by seven operator groups, GSMA Intelligence put the cost of replacing mobile networks at β¬16 billion to β¬22 billion, equating to around β¬30 to β¬42 per mobile connection. This is driven by high exposure to HRV equipment and the cost of replacing equipment such as base stations.
Fixed network costs will hit up to β¬5 billion, representing the costs of fibre terminals, gateways and fixed wireless equipment. Transport networks, which includes optical switches, multiplexers and amplifiers will cost between β¬9 billion and β¬12 billion.
The figures cover only direct equipment replacement and exclude write-offs of existing assets, disruption cost, capacity constraints and broader impacts on future investment plans.
Higher prices
GSMA Intelligence further warned excluding HRVβs could reduce competitive pressure, leading to a 24% price increase in mobile network equipment, 19% in fixed network equipment and 10% in transport network equipment.
Higher prices would therefore raise operator investment costs by β¬8.5 billion between 2027 and 2030, with current budgets for mobile networks set at nearly β¬42 billion.
The European Commission outlined a proposal making it mandatory to βde-riskβ European mobile telecoms networks from high-risk third party suppliers in January, as part of revisions to its Cybersecurity Act.
Over a five year period, it estimated phasing out equipment could lead to annual costs of β¬3.4 billion to β¬4.3 billion for operators, while investment in βtrusted suppliersβ could grow up to β¬2 billion per year.
Operators Deutsche Telekom, Fastweb, MEO, Orange, Telefonica, United Group and Vodafone Group took part in the GSMA Intelligence study, which was based on limited datasets provided by third parties.
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