Banning Huawei and fellow Chinese equipment manufacturer ZTE from 5G telecom networks being rolled out in Europe would cost EU mobile firms up to $62 billion, according to an international industry body’s internal assessment seen by AFP.

The operators would also face delays of up to 18 months in getting next-generation 5G out to their customers, according to the impact assessment drafted by the GSM Association, which represents mobile network operators.

The US government has demanded that companies in Europe and other allied nations reject Huawei as a 5G equipment supplier because of Washington’s fears it could compromise intelligence services.

The GSMA assessment notes that Huawei and ZTE account for around 40% of the EU market for mobile equipment, and Huawei “is currently a pioneer in 5G technology.”

European rivals Ericsson of Sweden and Nokia of Finland, and South Korea’s Samsung do not have the capacity to handle the entire transition from 3G and 4G networks to 5G in Europe while honouring contracts already signed in North America and Asia, it said.

That means significant costs and delays should operators not be able to use Huawei and ZTE, GSMA said, though it noted the situation differed significantly from one EU country to the next.

“A ban on Chinese vendors would severely lessen competition in the mobile equipment market, increasing prices and driving additional 5G rollout costs,” the assessment said.

It would also “result in slower rollout of 5G networks in Europe and reduced take-up, which would further increase the productivity gap between the EU and the US,” the document said.

Washington in May prohibited US companies from selling Huawei US-made components it needs for its equipment A 90-day reprieve was later granted to allow for the ban to be phased in.

That measure could threaten the survival of Huawei, one of China’s corporate giants, according to experts, because of its reliance on American electronic parts.

– with reporting by AFP