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Huawei-commissioned report warns of dire consequences from UK 5G delay

A new report estimates the UK could miss out on £108 billion worth of economic benefit and 350,000 new jobs due to a three-year delay in the country’s 5G rollout.

The report, titled “Regional and consumer impact of a delayed 5G roll-out”, is the second instalment of research produced for Huawei by the London-based independent research firm Assembly Research. In their earlier report, “Macroeconomic impact of a delayed 5G roll-out in the UK”, the analysts estimated that a three-year delay in the country’s 5G rollout resulting from the Huawei ban, could cost the UK £18.2 billion and its 5G leadership aspiration.

In this follow-up report the analysts broke the macro impact down to regional and city levels and quantified what would be at stake if the 5G rollout was delayed as projected. The analysis assumed that the delay would most affect North East and North West of England, the Midlands, and the rural areas in general, because the operators would prioritise London and the South East where they could expect higher return.

As a result, consumers and businesses in places more likely to be deprioritised by the operators would have the most to lose, which would widen the already existing digital divide in the country. To quantify it, the authors estimated that £108 billion and 350,000 new jobs, out of the £173 billion and 605,000 jobs 5G is expected to generate in the UK, could fail to materialise.

Such a scenario, the report argued, would go against the government’s pledge to “level up” the economy. This is a precise hit, and potentially a useful tool to change the government’s mind. Boris Johnson won the last general election in a landslide, knocking down the so-called Labour’s Red Wall in the north of England, largely thanks to the “level-up” promise that a Conservative government would strive to rebalance the country’s economy away from London and the South East.

It should not come as a big surprise to find that research projects and reports commissioned by companies more often than not end up with conclusions that support the sponsors’ agendas. Nonetheless, a couple of points in this report may be worth highlighting.

The authors were cautious enough to provide plenty of caveats to their conclusion. They clarified that they calculated the “potential total benefit of 5G to the different regions of the UK. This is to show what is at stake for the different regions, it is not an estimate of what they will miss out on.” The methodology the authors described at the end of the report is legitimate but crude. They used a top-down approach to split the benefits (monetary and job opportunities) to regions and cities based on the regional and city GDP (published by the Office of National Statistics in 2017). By the authors’ own admission “the actual distribution of jobs may not follow the pattern of GDP.”

The “three-year delay” starting premise was taken from Oliver Dowden, the Digital, Culture, Media and Sport Secretary’s statement on telecoms to the Parliament delivered in July this year. When assessing the impact of the decision to ban Huawei from UK 5G, Dowden said “this means a cumulative delay to 5G rollout of two to three years and costs of up to two billion pounds.” So the authors were taking the worst case scenario (three-year delay) as the base case. Meanwhile, when calculating economic and job contributions 5G could generate the authors decided to source the best scenario numbers, by citing studies commissioned by Qualcomm and Huawei.

It would be interesting if the authors could also look at alternative scenarios that might happen in the UK. The United States and Japan have not used Huawei in their 5G networks but have not experienced a three-year delay to its rollo-out. The authors cited Telia Finland as a success case for 5G-based FWA, but that operator has never had Huawei equipment in its networks either.

UK’s potential delay would come more from removing existing Huawei equipment than not using Huawei in the future. When it comes to calculating 5G’s benefit, not all sides would agree to the estimated trillions of value-add promoted by companies that have entrenched interest in 5G. Gartner, for example, believed 5G was already at its peak of inflated expectations. Full versions of the two Huawei commissioned reports can be found here and here.

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14 comments

  1. Avatar Nemanja 28/10/2020 @ 3:21 pm

    Good Job, UK. Follow US down the the bottom

    • Avatar John 29/10/2020 @ 9:23 am

      Biased report paid by Huawei. Ericsson, Nokia and Samsung can easily replace Huawei. Also, the expectations on the financial impact of 5G are inflated.

    • Avatar mick 29/10/2020 @ 11:53 am

      keep crying … and praying for huawei and communist china

      • Avatar George 29/10/2020 @ 12:47 pm

        The one thing I know about the Chinese people is they’re smarter than us in general, and you deplorables in particular. Poll shows majority of Russian and Chinese citizens favor your idol Trump over Biden. In contrast, only 15% of German citizens favor Trump. Think about that.

        • Avatar mick 01/11/2020 @ 12:27 am

          lots of people smarter than you. that’s for sure.

      • Avatar Khairul 30/10/2020 @ 5:07 am

        Keep brown-nosing Trump. Funny how Huawei was fine until Trump wanted a sparring partner…

  2. Avatar xyz 29/10/2020 @ 1:48 pm

    wealth over helath.. cccc.. prison or jail is small for you technocrats.. JAIL

  3. Avatar Doesn't matter 29/10/2020 @ 3:04 pm

    Yeah and what’s the cost of communist china owning all our data and using it to manipulate trade and geo political agendas?

  4. Avatar jjamain 29/10/2020 @ 10:31 pm

    Techonophobia… I thought olny the old generation have this… 😊

  5. Avatar Diane Green 29/10/2020 @ 11:31 pm

    So now we depend on Reports commissioned by Huawei for information. Talk about the fox guarding the chicken coop. 🙂

  6. Avatar Paul Boyington 30/10/2020 @ 12:23 am

    We all need 5g, quicker the better, might get to the moon

  7. Avatar Michael 30/10/2020 @ 3:42 am

    Racism exists in business.

  8. Avatar happiman 30/10/2020 @ 11:48 pm

    “You are an established Canadian advertising company that has just set up a _______ branch. You are very excited to be here and are eager to acquire your clients. You enter the tendering process to obtain a lucrative contract to create a series of adverts for Brand X. You lose the bid though the price of the final bid is not known, and the contract goes to small ________ company with only a few employees. You later find out that this small, not very well known _________ company is registered to the son-in-law of a powerful _____ government official. This small and not very well-known _________ company subsequently contacts your company and tries to outsource the work of the contract they won to you.”

    Which country do you have in mind that the corrupt business would happen?
    a) UK
    b) Singapore
    c) China
    d) US
    e) German
    f) Brazil

    Hint: https://www.tradecommissioner.gc.ca/china-chine/market-facts-faits-sur-le-marche/153381.aspx?lang=eng

  9. Avatar Jim Strunk 02/11/2020 @ 3:00 pm

    The Chinese are replete with examples of taking numerous company’s information, reverse engineering and remanufacturing it with their labels upon it. They’ve done it since the 80’s when I was in the disk drive business and it continues today. It’s been shown in so many studies that the CCP is working overtime to monitor and utilize data collection across the world. The question we should ask, “why are they doing this?”. Probably the same reason that NSA controls and monitors data as well. Draw the line in the sand, where do you stand? There’s a quote that can’t remember the person but it goes like this; “Name calling is the last resort of “non-thinkers” that haven’t the capability to critically think. Should this company’s products be deployed in our National Networks; you decide and have your opinion but make up your own mind. For me, IMO, firewall them from extending their arm and tentacles in our country. Besides, we have our own internal battles to fight with pushing Socialist agendas: As Angela Davis, our great Marxist so stated: “Joe Biden is not the best candidate but he’s the one we can most effectively pressure….Biden is far more likely to take mass demands seriously. The election will ask us not so much to vote for the best candidate but to vote for or against ourselves. And to vote for ourselves, I think means that we will have to campaign for and vote for Biden.”

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