Ericsson champions competition with Huawei and ZTE as it reaffirms commitment to Chinese market

The Swedish telecoms giant wants to avoid potential backlash in China, a major source of revenue for the company
Huawei is battling Swedish sanctions that bar the company from supplying 5G network equipment to the Nordic nation

Huawei

Che Panin Beijing

Published: 6:00pm, 22 Apr 2021

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Executives of Swedish telecommunications giant Ericsson said it welcomes market-based competition from rivals including Huawei Technologies Co, which is fighting a decision by regulators to exclude the Shenzhen-based company’s equipment from Sweden’s 5G network.

“Confrontation and increasing polarisation will not make the world safer,” Chris Houghton, senior vice-president at Ericsson and head of market for Northeast Asia, told reporters via video call at an event in Beijing on Thursday.

Global efforts to improve telecoms technology have been supported by hundreds of companies over the years, Houghton said, adding that it is impossible to ignore the role that “Chinese innovators” play.

“Anything that restricts competition risks slowing down the industry. Market outcomes should be decided by technical performances on the competitiveness of different solutions,” he said.

Ericsson CEO Börje Ekholm talks to the media after presenting the company’s fourth quarter and 2019 full year results at the Ericsson headquarters in Stockholm, Sweden, on January 24, 2020. Photo: Reuters

Ericsson has been campaigning for months against the Swedish government’s ban on Huawei.

Earlier this week in an interview with Chinese media outlet Caixin at the Boao Forum for Asia, Ericsson president and CEO Börje Ekholm said “geopolitics may jeopardise” the company’s collaboration with Chinese peers, such as Huawei and ZTE, in setting unified global standards in the telecoms industry.

Ericsson is also worried about the impact of Sweden’s ban on Huawei gear to its business in China. The company said in its 2020 financial report that Swedish sanctions on Huawei risks creating exposure for its operations in the world’s second-largest economy.

Last year, China was Ericsson’s second-largest market after the US, contributing 8 per cent of the firm’s revenue – up from 7 per cent in 2019. The company provides equipment and end-to-end services to state-owned carriers China Mobile, China Unicom and China Telecom, which serve more than 350 million 5G mobile subscribers in China in total.

China, which has put 5G at the top of its agenda to foster a digital economy, was home to 792,000 5G base stations at the end of February, according to data from China’s Ministry of Industry and Information Technology, making it the world’s largest 5G network.

Attendees walk past a display for 5G services from Huawei at the PT Expo in Beijing, China, on October 31, 2019. Photo: AP Photo

On Thursday, Ericsson vice-president Sinisa Krajnovic, who heads the firm’s digital services for Northeast Asia, suggested that uncertainties remain over whether the company could fall victim to geopolitical tensions.

“When it comes to China, there are things we can control and things we can’t control,” Krajnovic said. He indicated that countries like China, which invested early in 5G technologies, are more likely to lock in “competitive advantages” than latecomers.

The Administrative Court in Stockholm on Wednesday started hearing Huawei’s argument on whether the Swedish authority’s restrictions are lawful.

The Swedish Post and Telecom Authority decided last October to bar the world’s biggest telecoms gear maker from supplying the country’s mobile network operators in their 5G roll-outs, citing security risks. The regulator also slapped a similar ban on ZTE.