European telecom operators could get more time to remove network equipment supplied by companies classified as high risk, as the industry warns that an accelerated replacement programme could cost as much as €40 billion ($45 billion) and divert investment from fibre, 5G and future 6G networks.
The development could significantly change the investment implications of Europe’s effort to reduce dependence on suppliers such as Huawei in critical telecom infrastructure, Reuters news report said.
The European Commission proposed in January 2026 that equipment from high-risk suppliers should be phased out from critical sectors as part of its proposed overhaul of the EU Cybersecurity Act. For mobile operators, the original proposal envisaged a 36-month phase-out period.
However, EU governments have removed that fixed deadline from their proposed amendments, according to a September 22 document. Instead, the timetable could take into account security risks, infrastructure lifecycles, equipment replacement cycles, interoperability and the availability of suitable alternatives.
The change potentially gives operators greater flexibility to coordinate security-driven equipment replacement with their normal network-modernisation cycles.
€40 Billion Replacement Cost Becomes Major Issue
Cost has emerged as one of the industry’s strongest arguments against a rapid phase-out.
Deutsche Telekom CEO Timotheus Hottges and 16 other industry executives warned EU policymakers in September that replacing high-risk supplier equipment could cost operators as much as €40 billion.
They argued that such expenditure could reduce capital available for fibre, 5G and 6G network investment.
The €40 billion figure should be viewed as an industry estimate rather than an established EU cost estimate. Other estimates have been considerably lower.
The difference is important because removing functioning telecom equipment is fundamentally different from investing in additional network capacity. Operators may have to replace radio, transmission or other network components without necessarily adding subscribers, coverage or network capacity proportional to the expenditure.
For European telecom companies already balancing spectrum costs, network upgrades, energy expenses and pressure on returns on invested capital, the timing of the replacement programme therefore matters almost as much as its ultimate cost.
Allowing equipment to be replaced closer to the end of its normal economic life could reduce stranded assets and enable operators to combine security-related replacement with scheduled 5G upgrades.
Germany, Italy and Spain Face Significant Replacement Requirements
The impact will not be evenly distributed across Europe.
Germany, Italy and Spain are expected to account for a large proportion of equipment that would need replacement during the next five years.
Deutsche Telekom and Vodafone have significant dependence on Huawei equipment in some European markets.
That makes the policy particularly important for large multinational operators.
A rigid three-year deadline could force operators to accelerate procurement, engineering work and network migration simultaneously. A more flexible timetable could allow replacement to coincide with planned radio upgrades, equipment retirement and broader network transformation programmes.
Interoperability is another consideration. Mobile networks contain equipment from multiple generations and vendors, meaning that replacing one supplier is not necessarily a simple hardware swap.
The latest proposal explicitly recognises product lifecycles, infrastructure lifecycles, replacement cycles, interoperability requirements and availability of suitable alternatives when determining phase-out periods.
EU Cybersecurity Policy Has Been Tightening Since 2020
The dispute is the latest stage of a much longer European effort to strengthen telecom supply-chain security.
The EU introduced its 5G cybersecurity toolbox in 2020, establishing measures for assessing supplier risks and reducing dependence on vendors considered high risk.
The European Commission subsequently strengthened its position.
In June 2023, the Commission said decisions by EU member states to restrict or exclude Huawei and ZTE from 5G networks were justified and consistent with the EU 5G Cybersecurity Toolbox.
The Commission said Huawei and ZTE represented “materially higher risks” than other 5G suppliers based on criteria used to identify high-risk suppliers.
Huawei has consistently rejected claims that its telecom equipment creates a security risk.
Revised Cybersecurity Act Raises Stakes
The policy moved further in January 2026 when the Commission proposed a revised EU Cybersecurity Act.
The proposal aims to strengthen European cybersecurity resilience while improving security across ICT supply chains. It introduces a more harmonised EU approach to dealing with suppliers associated with cybersecurity concerns.
The Commission says the framework is intended to address not only technical vulnerabilities but also strategic supply-chain risks associated with dependencies and potential foreign interference.
Its Cybersecurity Package Q&A says operators of electronic communications networks should not rely on high-risk suppliers for critical assets.
The approach is intended to be harmonised, proportionate and risk-based.
The September proposal from EU governments does not necessarily reverse that policy. Instead, it could change how quickly operators must implement it.
That distinction is significant for telecom investment.
Ericsson, Nokia and Other Suppliers Could See Opportunities
The removal of Huawei or other high-risk suppliers would also reshape Europe’s telecom equipment market.
Replacement programmes could potentially generate additional opportunities for alternative telecom network vendors as operators procure radio access network, core network, transmission and associated infrastructure.
Ericsson and Nokia are obvious potential beneficiaries because of their existing positions across European mobile networks.
However, Huawei replacement spending should not automatically be treated as equivalent revenue for rival vendors.
Operators could combine replacement programmes with network consolidation, equipment rationalisation, Open RAN deployments or broader architecture changes. They may also negotiate replacement as part of existing 5G modernisation contracts.
The availability of alternative suppliers is now explicitly one of the factors EU governments want considered when determining phase-out periods.
That could help avoid situations in which operators are required to replace equipment before technically and commercially suitable alternatives can be deployed at scale.
EU Broadens Focus From 5G to ICT Supply Chains
Europe’s policy is also expanding beyond individual 5G vendors.
In February 2026, EU member states, the Commission and ENISA adopted an ICT Supply Chain Security Toolbox establishing a common approach for identifying, assessing and mitigating ICT supply-chain cybersecurity risks.
One of its recommendations is to reduce dependencies on high-risk suppliers.
The direction therefore remains clear: Europe wants greater control over dependencies in critical digital infrastructure.
The debate is increasingly about how that objective can be achieved without undermining network investment.
Security vs Telecom Investment Becomes the Key Question
For European telecom operators, the issue is no longer simply whether high-risk suppliers will face restrictions.
The critical question is how quickly existing equipment must be removed and who absorbs the cost.
A fixed 36-month deadline would have concentrated billions of euros of replacement spending into a relatively short period. A risk-based timetable aligned with normal equipment lifecycles could spread the investment across a longer period and potentially reduce the economic impact.
That could be particularly important as European operators continue investing in 5G standalone networks, fibre infrastructure and network automation while preparing for the next generation of mobile technology.
The industry’s warning that replacement could reach €40 billion puts the scale of the policy debate into perspective. Even if actual costs ultimately prove lower, forced replacement represents capital that operators argue could otherwise support network expansion and modernisation.
EU governments must still negotiate their amendments with European lawmakers before the revised Cybersecurity Act becomes law.
The final rules will therefore determine more than the future role of Huawei and other suppliers considered high risk in Europe. They could also influence where European telecom operators direct billions of euros of network capex as the industry moves from 5G toward 6G.
BABURAJAN KIZHAKEDATH
