Monday, 04 March 2019 18:49

Huawei 5G ban could lead to 30% higher costs in Australia Featured

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The Australian Government’s ban on using Chinese supplier Huawei Technologies in the rollout of 5G networks in the country will cost telecommunications operators dearly for networking equipment, according to a global management consulting firm.

Management consultancy Arthur D. Little, Australian telcos will end up paying significantly higher prices for networking equipment because of the reduced competition due to the Huawei ban.

ADL last week released its 5G Country Leadership Index, which benchmarked more than 40 countries with regard to the performance of their 5G implementations.

ADL told iTWire that the Index identified Australia as one of the leaders in the advancement of its rollout because of good fibre coverage with the NBN, successful completion of the first spectrum auction, strong mobile network operator competition in the local market and high ICT adoption tendency (high income, high 4G usage)

However, Australia’s ban on the use of Huawei technology threatens to make the technology needlessly more expensive for network operators and as a consequence endusers.

“Banning Huawei can have two consequences,” Karim Taga, managing partner and global practice leader TIME at ADL, told iTWire.

“The Chinese vendor has been doing well in pushing price competition. The cost of networking equipment in the US versus Asia is up to 30% more expensive.”

The other major downside of banning Huawei, according to Taga, was in the deployment of best in class technology.

“(Australia) may miss some of the 5G innovation potential coming from Huawei,” Taga said.

Australia is one of very few countries in the world, along with the US, to issue an outright ban on the use of Huawei in its 5G rollout.

The UK and most of the EU have yet to issue blanket bans, with UK spy agency GCHQ stating that it can it mitigate any perceived risks from the use of Huawei in that country’s 5G networks.

Even New Zealand appears to be reconsidering reopening the door for the use of Huawei in its 5G rollout after the country initially issued a blanket ban.

In December, Huawei rotating chairman Ken Hu claimed that Australia's ban on the use of the company's 5G equipment would result in the cost of deploying wireless base stations being higher by anything from 15% to 40%,

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Stan Beer

 

Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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