Costs To Rip Huawei Out Of Networks Are Going To Hurt US Providers

Cell Towers Network AH NS 01 AH 2019

Efforts to remove Huawei and ZTE equipment from US mobile networks are going to rack up costs for small carriers. That’s according to a recent report from The Verge, citing statements from the FCC. In fact, it could cost small providers in the country more than $1.8 billion.

Specifically, that’s those carriers that tend to service ‘underserved’ areas. Those carriers receive support from the Universal Service Fund, meant to help ensure that more Americans have ready access to mobile connectivity.

That means that the figure reported by the FCC is not the full figure. It doesn’t, for example, account for all carriers that use the Chinese equipment. Or for small carriers who haven’t reported in yet, the figure is likely a lot higher.


How are small US networks going to cover costs to replace equipment?

Among those carriers that are reporting, some are also reporting that they won’t be able to handle the cost. At least not on their own. Eastern Oregon Telecom is one such carrier, the source reports. The equipment the carrier needs to replace, it says, is valued at just $500,000. But removing it and replacing it will cost the small company as much as $1.5 million.

A similar circumstance exists across many of the less mainstream carriers within the US.

As much as $1.6 billion, conversely, is set to be provided to the carriers in the form of federal reimbursement. Or at least that’s how much of the cost is eligible for reimbursement. That leaves around $200 million unaccounted for, anyway. But Congress has not approved or allocated the funding to cover those expenses yet.


FCC Chairman Ajit Pai has called on Congress to act in the interim. But the costs to remove Huawei and ZTE from US networks are not being met, as of this writing. That’s despite approval for the process to allow the spending happening back in March as part of the Secure and Trusted Communications Networks Act.

Why is Huawei and ZTE equipment being removed?

The removal of Huawei and ZTE equipment from US networks follows in lock-step with the long decline of trust in Chinese OEMs. That’s at the state and federal level. The concern, of course, is that Huawei and other tech giants could potentially be turned into spy tools for the Chinese government.

The movement has culminated in not just plans to reimburse US carriers but also incentivization for allied countries to do the same.