Dire warning that Huawei 5G Australia ban could cost economy US$8.2 bn in lost GDP.

Dire warning that Huawei 5G Australia ban could cost economy US$8.2 bn in lost GDP.

Up to 3 million Australians – mostly in rural and regional Australia – will miss out on getting access to critical 5G technology by 2023 because of the Australian Government’s 5G ban on China’s Huawei in Australia – and come at a cost to the national economy of US8.2 billion in lost GDP gains, according to UK based global forecasting and quantitative analysis firm Oxford Economics.

According to Oxford in its newly released Restricting Competition in 5G Network Equipment report, the failure to deliver 5G nationwide by 2035 – meaning critical rural and regional businesses such as farming and the resources sector will miss out on 5G technology – will increase local operators’ deployment costs by up to $300 million annually over the next 10 years – with the near 30% cost increase inevitably leading to higher prices for consumers.

“The arrival of 5G will unlock new income streams for businesses in all sectors of the economy, and increase their productivity levels, through enhanced capabilities including higher data speeds, lower latency, and network slicing….this will allow the development of “mission critical” applications,” says Henry Worthington, Associate Director at Oxford Economics.

“However, it is broadly agreed that restricting such a significant player from bidding for 5G contracts will lead to higher prices, rollout delays and hence a slower diffusion of associated technological innovation.

“For Australia, the resulting loss in productivity has significant economic consequences. Lower economic growth due to delays in 5G rollout and the associated slower technological growth reduces GDP by [up to] $8.2 billion in 2035.”

Commenting on the Oxford Economics report, Jeremy Mitchell, Director of Corporate Affairs at Huawei Australia said, “This report underlines what we have been saying since the Turnbull government excluded Huawei from delivering 5G – the decision will only end up hurting ordinary Australians, especially hitting hardest those in regional Australia”.

“Australian broadband consumers are already saddled with the huge costs of paying for the $151 billion NBN so the last thing they need are substantially higher costs on building out 5G,” Mitchell says.

“These extra costs mean that operators simply won’t be able to afford to deliver 5G services across rural and regional parts of Australia where the technology could be most beneficial.

“For urban Australians – many of whom already have fixed-broadband – 5G will deliver Gigabit speeds that will help them stream 4K video and enjoy better online gaming – it’s the cherry on the cake.

“But for rural and regional Australians 5G enables the kind of next-generation connectivity that enables them to operate their farming and agricultural businesses more productively.”

Mitchell said that farmers in countries like Switzerland are already using 5G on new applications like monitoring their livestock – “but Australian farmers simply won’t be able to use those kinds of applications”.

“Regional and rural Australia has already been saddled with the hugely problematic NBN Satellite and Fixed Wireless services that normally deliver low-speeds in peak-times – they can’t be let down on 5G too.”

To download the full report from Oxford Economics click here.


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