Sweden must see the bigger picture
Competitors seldom back each other unless a third-party decision threatens their very foundations, forcing them to realize an open and fair competition could be mutually beneficial.
Swedish telecom equipment maker Ericsson has called out the country’s 5G ban on Huawei and underlined that competition is good and should be welcomed.
Borje Ekholm, CEO of Ericsson, said in an interview with Financial Times that Sweden’s decision to ban Chinese telecom equipment makers Huawei and ZTE restricts free competition and trade.
“I belong in that category that believes competition makes us longer term a better company. It may be painful shorter term but longer term it drives us to be more innovative and make better products for our customers,” he told FT.
Ekholm’s comments came after Swedish telecoms regulator PTS halted 5G spectrum auctions in November after a court suspended part of its decision that had excluded Huawei from the country’s 5G networks under the pretext of national security without any evidence.
As Huawei is defending its legal rights and interests by appealing this decision in court, the rollout of its 5G network has slowed in Sweden. Ekholm warned that when the 4G rollout happened, Europe was slow to adopt it and if the situation repeats, the regional economy may suffer as a result.
Ericsson’s stance indicates that Sweden’s politically-motivated excuses of “national security concerns” and discriminatory regulations on specific Chinese companies are unsupported even by its own company, and such a biased decision will eventually harm itself and disadvantage its businesses.
Last month, the European Competitive Telecommunications Association also expressed similar concerns. The association, which represents more than 100 of the leading telecom operators and digital solutions providers across Europe, said “it denounced any bans on Chinese 5G suppliers for geopolitical reasons” and emphasized that “such decisions can only be justified on the basis of well-established facts”.
The association warned that the ban will not only delay the deployment of 5G networks and constrain innovation potential, but also have important wider socioeconomic consequences.
Although Huawei’s struggle in Sweden caught the attention of many, little has been said about how companies like Ericsson have made huge gains in China, which has been its second-largest single market. The two telecom gear makers’ fate is a study in contrast.
Till date, Ericsson has won contracts from all three major telecoms operators in China to supply radio equipment for 5G networks, and amid the COVID-19 outbreak, the local governments have also worked to help Ericsson resume its China businesses as soon as possible.
Ericsson China told China Daily earlier that the company has participated in China’s construction of 1G all the way to 4G networks, and it aims to be an important part of the nation’s 5G innovation system.
But Sweden’s biased decision on Chinese telecom gear makers might disrupt Ericsson’s ambitions, and even damage Sweden’s trade ties with China, its largest trade partner in Asia.
One cannot expect China to swallow such unfair treatment of its telecom companies, which have strictly observed local laws, actively promoted cooperation between China and Sweden on information and communications technology, and contributed to Sweden’s infrastructure building.
China’s Foreign Ministry has already urged Sweden to reverse its 5G decision on Chinese companies, to prevent the move from having a negative impact on bilateral trade cooperation and the operations of Swedish companies in China.
Let Sweden’s trade with China and its businesses in China not be at the mercy of a politicized decision. Such a move will not be a desired result for Swedish companies, which have benefited significantly from China’s opening-up, and have advocated free competition and trade for a long time.