Ericsson ‘ unwilling to lose Chinese market’ over ban on Huawei

A Swedish media outlet has reported that Swedish telecoms giant Ericsson opposes a government ban preventing Huawei and ZTE from participating in the construction of 5G in the country.

Borje Ekholm, CEO of Ericsson, said that Ericsson would leave Sweden if authorities supported the ban on Huawei and ZTE, local newpaper Dagens Nyheter ( DN) reported.

“Ericsson is reluctant to face retaliation for Sweden’s unwarranted offense against Chinese firms. Sweden’s market is too small. Demographically speaking, it’s only half the size of Beijing. But the Chinese market is so big that Ericsson’s presence in the Chinese market means it has a future in the 5G era, so it’s not hard to choose between China and Sweden,” Zhang Xiaorong, director of the Beijing- based Cutting- Edge Technology Research Institute, told the Global Times on Monday.

But Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, said that it will not be easy for Ericsson to exit Sweden.

“The remarks of the Ericsson CEO made it clear that the company does not want similar bans on enterprises like Huawei, which some countries have politicized in business affairs. In the short term, some companies may think that they can achieve a better performance or have a larger market share after excluding Chinese companies. But in the long run, if countries ban Chinese firms and Chinese technology today under US pressure, will they ban EU firms tomorrow?” Wang told the Global Times on Monday.

Ericsson generates about 10 percent of its sales in China, according to financial reports.

As of December, about 130 operators in over 50 markets had built commercial 5G networks, but the scale of network users was lower than expected. The number of 5G users in China had reached nearly 200 million, accounting for 85 percent of the global total, per industry data.