The European telecommunications industry faces an unprecedented challenge: the mandatory replacement of equipment from so-called high-risk vendors, primarily Chinese manufacturers Huawei and ZTE. According to the latest GSMA Intelligence report, the cost of this operation could reach €40 billion ($45.5 billion), a figure that includes not only physical infrastructure replacement but also the impact on network performance and future investment plans.
The proposed European Commission regulation, Cybersecurity Act 2 (CSA2), requires member states to remove and replace critical telecom equipment supplied by High-Risk Vendors (HRVs) within three years. This measure responds to growing concerns about digital security and the resilience of critical infrastructure in an increasingly tense geopolitical context. However, the scale of the project and its economic consequences have sparked intense debate among operators, regulators, and industry experts.
The GSMA Intelligence report, based on a survey of seven major European operator groups, estimates total costs between €30 billion and €40 billion. Taking a midpoint of €35 billion, mobile networks would absorb €19 billion, fixed infrastructure €5 billion, and transport networks — including optical backbones and submarine cables — €11 billion. Added to this are indirect cost overruns from reduced competition in the equipment market. GSMA calculates that mobile equipment prices could rise by 24%, fixed network gear by 19%, and transport equipment by 10%, resulting in an additional incremental cost of around €8.5 billion for the 2027-2030 period.
The impact is not limited to direct spending. Eliminating vendors like Huawei, which reportedly supplied nearly 60% of Germany's 5G infrastructure, restricts supply and raises acquisition costs. Operators must decide whether to pass these increases on to users through higher tariffs or cut investments in network upgrades and new technology deployments. This dilemma jeopardizes the EU's ambitious Digital Decade 2030 goals, which aim for ultra-fast and widespread connectivity.
A telling example is the United Kingdom, which under pressure from the previous US administration forced the removal of Huawei equipment from its 5G networks. The consequences have been dire: British networks rank among the worst in Europe for service quality, and operators had to divert funds from coverage expansion to replacement, delaying technology adoption. Paradoxically, in the United States some networks still use Huawei equipment without replacement, awaiting government funding.
In this environment of uncertainty and rising costs, telecom companies need technological solutions that optimize their resources and minimize operational impact. This is where companies like Q2BSTUDIO can make a difference. As a software and technology development firm, Q2BSTUDIO offers specialized services that help operators navigate this transition more efficiently. For example, developing custom software applications enables creation of network monitoring and management tools that facilitate integration of new equipment and minimize downtime. Additionally, implementing cloud AWS/Azure solutions provides a scalable platform for migrating critical workloads, reducing dependence on proprietary hardware. Cybersecurity becomes a key pillar: Q2BSTUDIO provides audits and cybersecurity services that protect networks against emerging threats, while BI/Power BI capabilities allow executives to make data-driven decisions on costs and performance in real time. Finally, integrating AI agents and artificial intelligence systems helps automate predictive maintenance and traffic optimization processes, easing pressure on operational budgets.
The overall economic outlook is also unfavorable. A KPMG study, although prepared in collaboration with the China Chamber of Commerce to the EU, estimates that these policies could lead to cumulative losses of up to €370 billion in the region by 2030. GSMA warns that more expensive or slower-deployed network infrastructure will hamper productivity, innovation, and economic growth. The lingering question is whether Europe is willing to bear this cost, or whether it will seek alternative formulas that balance security with economic viability.
Ultimately, replacing Huawei and ZTE equipment in European telecommunications represents an engineering, financial, and strategic challenge. Operators will need to rethink their business models and seek technology partners that provide flexibility and efficiency. Q2BSTUDIO, with its expertise in custom software, cloud, cybersecurity, and AI, positions itself as a key ally to face this transformation without sacrificing service quality or competitiveness.
