Despite Huawei’s dominance, Ericsson refuses to exit China 5G equipment market: Report

Huawei is gradually progressing in the China 5G equipment market, which seems a growing challenge for other tech vendors in this field, including Ericsson. Yet, the Swedish telecom equipment company denies leaving the platform.

Responding to a media report on the departure from the 5G equipment market, Ericsson said it will remain committed to its customers in China. Notably, the respective firm continues to lose its space due to the strong grip of Huawei on this ground.

Last year, the Chinese tech giant achieved 52% of the 5G equipment from China Mobile and secured the top position in the telecom ranking. It has covered over 45000 5G base stations and increased sales by 4.1 billion yuan ($574 million).

ZTE obtained the second place in this listing with 26% whereas, Ericsson scored the remaining 22% of contracts from Datang and Nokia. At the same time, the Swedish company trapped in geopolitical issues in China after Stockholm restricted operators from using Huawei equipment in Sweden.

The Chinese tech maker faced prohibition in Sweden over 5G network equipment. Eventually, the authorities ordered the local network operators to pull out Huawei network components from their infrastructure by January 01, 2025.

In response, Beijing implied that the same treatment could be given to overseas companies and it would take all necessary measures to defend Chinese firms globally.

Huawei Image (Credits: SCMP)

China-Sweden Relation:

While sharing the recent financial record, Ericsson mentioned the knots in the China-Sweden relationship may act as a major risk factor for the company’s operations:

“Further changes in economic and political policies in or relating to China may have a material adverse effect on the company’s business.”

The net sales of Ericsson dropped by 10% in 2023, facing a fall of 41% in North America due to a reduction in capital expenditure. Besides, the worldwide headcount declined from 105,529 to 99,952.

The CEO of Ericsson – Borje Ekholm believes in normalizing things this year. Even though Ericsson is trying to alter its cost-saving strategy in 2024, it seems difficult for the firm to take over Huawei in the China 5G equipment market.

(Source)