The €40 Billion Question: What It Really Costs Europe to Strip Huawei and ZTE from Telecom Networks

In July 2026, GSMA Intelligence — the research arm of the global mobile industry body GSMA — published a report that put a stark price tag on European ambitions to remove Chinese telecom equipment. Commissioned by seven major European operator groups including Deutsche Telekom, Vodafone, and Orange, the study estimated that replacing equipment from so-called "high-risk vendors" (Huawei and ZTE) across EU telecom networks would cost €30 billion to €40 billion ($34–46 billion) . The figure immediately ignited debate, not least because it landed at three to four times the European Commission's own projections.

How the GSMA Estimate Compares to Brussels' Numbers

The European Commission had previously estimated the cost at roughly €10 billion to €13 billion in total over a three-year transition period, or about €3.4 billion to €4.3 billion annually for mobile operators . The GSMA's range — as much as €40 billion — represents a 3–4x premium over the Commission's top-end figures. That gap is at the center of a fierce policy dispute over whether the costs of a Huawei/ZTE phase-out are manageable or prohibitive.

The Cost Breakdown by Network Type

According to reporting by Politico on the GSMA Intelligence findings, the total estimate breaks down as follows :

• Mobile networks (RAN/core): €16 billion to €22 billion
• Fixed networks: €5 billion
• Transport networks: €9 billion to €12 billion

These three categories sum to the €30–40 billion total range.

Additional Competition-Related Costs (2027–2030)

Beyond direct replacement costs, GSMA projects an additional €8.5 billion in indirect costs from 2027 to 2030 due to reduced vendor competition. The logic: excluding Huawei and ZTE would shrink the supplier market, leading to higher prices from the remaining vendors (chiefly Nokia and Ericsson) and less competitive pressure on equipment pricing .

Why Critics Say the Numbers Are Too High

Several analysts and independent researchers have pushed back hard against the GSMA figures.

Hosuk Lee-Makiyama, director of the European Centre for International Political Economy (ECIPE), told Politico that the GSMA estimates are "gross, not incremental" — arguing that the report fails to deduct replacement costs that would have occurred anyway as part of normal network upgrades . ECIPE's broader body of work has warned that blanket security-driven vendor bans impose disproportionate costs on European operators and risk slowing 5G deployment without commensurate security gains .

More dramatically, independent industry research firm Strand Consult published a counter-analysis estimating the actual one-time replacement cost at just $3.5 billion (roughly €3.2 billion at the time) — about 1/16th of GSMA's figure . Strand Consult's analysis, which was presented to ENISA (the European Union Agency for Cybersecurity), argued that GSMA had vastly overstated both the volume of Huawei/ZTE gear already deployed and the complexity of replacement . Strand Consult noted that in the preceding three years (as of 2019), European operators had bought about $8.75 billion in radio access network (RAN) equipment, with 40% coming from Huawei and ZTE — suggesting the replaceable base was far smaller than GSMA implied .

The core dispute is methodological: operator-commissioned studies yield large figures that support arguments for EU compensation or policy delay, while independent and pro-competition analysts produce far smaller figures suggesting the ban is manageable.

Questions Over GSMA's Credibility

Several factors have raised credibility concerns about GSMA's cost projections:

• Membership includes Huawei: GSMA is a global trade association whose membership includes Huawei itself, alongside the European operators who commissioned the report. This creates an inherent conflict — the report's headline figure serves the political interests of both Huawei (which benefits from high "cost of removal" numbers that may deter bans) and operators (who want higher EU compensation) .

• The 2019 precedent: In June 2019, GSMA projected that banning Chinese vendors from European 5G would add €55 billion ($62 billion) in costs and delay rollout by 18 months . That same year, Strand Consult published its counter-analysis estimating the actual replacement cost at just $3.5 billion — roughly 1/16th of GSMA's figure .

• A recurring pattern: Critics argue GSMA has a consistent track record of producing high-end cost estimates that align with its members' lobbying interests, while independent analysts have repeatedly produced far lower figures .

The Broader EU Regulatory Context

The cost debate is unfolding against a rapidly tightening regulatory backdrop.

Revised Cybersecurity Act (proposed January 2026): The European Commission unveiled a revision of the EU Cybersecurity Act in January 2026, aimed at enabling the mandatory exclusion of "high-risk third-country suppliers" from mobile telecommunications networks and other critical infrastructure . The act is designed to move beyond non-binding recommendations to legally enforceable bans.

Coverage across 18 sectors: A separate KPMG study commissioned by the China Chamber of Commerce to the EU (CCCEU) estimated that phasing out Chinese suppliers across 18 critical EU sectors between 2026 and 2030 would cost €367.8 billion — illustrating the enormous scale of the broader regulatory push .

Commission's May 2026 Recommendation: On May 4, 2026, the European Commission formally recommended that member states exclude Huawei and ZTE equipment from their connectivity infrastructure, marking a significant escalation from earlier voluntary guidance toward binding rules under the incoming Cybersecurity Act framework .

EU top court adviser's March 2026 opinion: Consistent with previous CJEU jurisprudence, the reasoning broadly confirms that member states can impose national security-based vendor bans under EU law, provided they are proportionate and non-discriminatory.

Germany's 2024 commitment: Germany agreed in 2024 to remove Huawei components from its 5G core networks by the end of 2026, as part of a phased agreement between the German government and operators like Deutsche Telekom.

A Wide Spectrum of Estimates

Item	GSMA Intelligence (July 2026)	European Commission	Strand Consult (2019)
Total direct cost	€30–40 billion	€10–13 billion	~$3.5 billion (€3.2 billion)
Mobile networks	€16–22 billion	N/A	N/A
Fixed networks	€5 billion	N/A	N/A
Transport networks	€9–12 billion	N/A	N/A
Indirect costs (2027–2030)	€8.5 billion	N/A	N/A

The €30–40 billion figure is best understood as one point in a wide spectrum of credible estimates, not an objective cost. The dispute is not just about the numbers but about methodology and interests: operator-commissioned studies yield large figures that support arguments for EU funding or policy delay; independent and pro-competition analysts produce far smaller figures that suggest the ban is manageable. As EU policymakers move toward making vendor exclusions legally binding, the true cost will only become clear once the first wave of replacements is complete.