According to EY‘s analysis, Huawei‘s exclusion from 5G networks in Portugal could cost €1.052 billion, including “€339 million in replacement investments and €193 million in future investments”, which could lead to “an estimated 7% increase in average tariffs”.
To account for the impact of €1.052 billion, the consultancy also considers €282 million associated with productivity losses, warning in this context of delays in the “full implementation of the 5G network in the country”, which could prevent “citizens and companies from taking full advantage of the advantages of the technology”.
It also takes into account 156 million euros in depreciation, €58 million in opportunity costs, and €24 million in energy consumption, according to the study.
In September last year, Huawei Portugal filed an administrative action against the Security Assessment Commission (CAS)’s decision on 5G equipment, with the aim of safeguarding its legal rights.
The CAS, within the scope of the Cyberspace Security Higher Council, had warned about the security of 5G networks and services when using equipment from suppliers that, among other criteria, are from outside the EU, NATO or OECD and that “the legal system of the country in which it is domiciled” or connected “allows the Government to exercise control, interference or pressure over its activities operating in third countries”.
The decision does not mention the names of companies or countries, but the fact is that the Huawei case comes to mind, particularly because the Chinese technology company was banned from 5G networks in other European countries.
In this study, the consultancy also refers to the impact of Huawei Portugal on the Portuguese economy, stating that it “contributes 718 million euros per year to the national economy, of which 197 million corresponds to Gross Value Added (GVA)”. “The multiplier effect of the Huawei ecosystem is 2x [twice] in national production”, the statement indicates.
In terms of employment, according to the study, “the multiplier effect is more significant, reaching 7x”, supporting 651 direct jobs and more than four thousand indirect jobs.
“The conclusions of the technical and factual study that we developed show that the economic impact of the operational activities of the Huawei Portugal ecosystem corresponds to approximately 0.3% of the national GDP”, highlights Hermano Rodrigues, principal at EY-Parthenon and coordinator of the study, quoted in the same note.