European telecom operators are bracing for a multi-year overhaul of their networks’ equipment as the EU moves to force out equipment form risky suppliers, chiefly China’s Huawei Technologies and ZTE Corp, though regulators and industry remain far apart on how much the telecom procurement strategy shift will cost.
The European Union (EU) is torn between two needs, one where it wants to reduce dependency on foreign operators, and the other where it’s thriving to build a stronger digital economy.
The European Commission has proposed a revision of the EU’s Cybersecurity Act (CSA2) that would bar products from designated risky vendors from EU 5G security certification across 18 key sectors, including telecoms, energy, and cloud computing.
Under the proposal published in January, the European Commission’s telecom procurement strategy dictates that mobile network operators (MNOs) would have 36 months from the date a supplier is formally designated risky to remove the equipment.
It’s worth noting that timelines for fixed and satellite networks have not yet been set. The plan still needs approval from EU governments and the European Parliament before it can take effect.
Global System for Mobile communications (GSMA) Intelligence, the research arm of mobile industry group GSMA, estimated that removing high-risk equipment from Europe’s mobile, fixed, and transport networks could cost operators between $34.22 billion and $45.63 billion (€30 billion to €40 billion), plus a further $9.69 billion (€8.5 billion) in higher equipment prices between 2027 and 20230 as the pool of approved suppliers narrows.
The European Commission’s own estimate of the telco procurement strategy is far lower, at $11.41 billion to $14.83 billion (€10 billion to €13 billion) over three years.
Europe Changing What It Buys
According to the European Commission, Chinese giants, Huawei and ZTE, present materially higher risks than other 5G suppliers, making telecom supply chain strategy a major investment issue.
Regulators also consider who can access sensitive systems, control software updates or manage important network functions, making telco supply chain risk part of security and investment planning.
Replacing working infrastructure can strain assets, accelerate spending, and add integration costs without new revenue. Therefore, managing telecom supply chain risk requires financing alongside regulation.
Europe already has channels including the European Investment Bank (EIB), InvestEU, the European Fund for Sustainable Development Plus (EFSD+), and the European Bank for Reconstruction and Development (EBRD).
These can help operators change telecom equipment suppliers without carrying out the full cost alone.
The EIB financed Latvia’s LMT for 5G and cybersecurity upgrades, while the EBRD structured up to $217.8 million (€190 million) for Tunisie Telecom. A stronger telecom procurement strategy could build on such models.
Guarantees, grants, tax incentives, spectrum fee relief and deferred payments can support the wider telecom supply chain shift while protecting investment capacity.
Yet, funding still needs a technical roadmap. Supply chain resilience in the telecom industry depends on replacing the systems, creating the greatest exposure first, not every physical asset at once.
Could Europe Finance the Transition?
A key part of the telecom procurement strategy is deciding which equipment should be replaced first. Not all Huawei or high-risk equipment needs to be treated the same way; the most sensitive systems come first.
Priority systems include mobile cores, subscriber databases, authentication, network management, remote-access tools, and software updated controls.
A smarter telecom supply chain strategy can preserve compatible passive assets such as towers, shelters, and usable fiber when they pass technical and security reviews.
During the transition, operators can reduce telco supply chain risk through segmentation, encryption, privileged access controls, monitoring and tighter limits on vendor remote access. These safeguards are temporary, not substitutes for required removal.
A phased telecom procurement strategy should still move sensitive management, authentication and software control functions into trusted environments.
For governments, utilities and transport providers, private 5G, dedicated trusted cores and local processing can reduce telecom supply chain risk while national networks are modernized.
Additionally, secure network slices can add isolation, but they still share public infrastructure. Protecting European telecom infrastructure requires knowing which radio, signaling, and management functions remain shared.
Telefónica argues that secure and resilient networks support Europe’s ambitions in AI, cloud, edge computing and advanced industry, linking connectivity with the region’s wider push for technological autonomy.
As a conclusion, Europe’s wider digital agenda links resilient networks with competitiveness and strategic autonomy. Which makes telco supply chain sustainability a balance between security, diversity, cost and investment.
The technology problem is not solved by immediate nationwide replacement or by leaving risky dependencies untouched. In fact, a good telecom procurement strategy plan means replacing systems that create the greatest security exposure first, financing the transition over time and keeping passive assets safe where possible.
This supports resilience without forcing operators to rebuild entire networks.
At the end, Europe already has financing institutions and technical tools, but the argument is that they must be organized around a clear transition plan that defines what is replaced, when it happens and how it is funded.
Will the EU succeed in achieving its goal?
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