Huawei may be losing ground in the U.S. and Europe, but Chinese telecoms are looking to China as they expand their own 5G networks. The South China Morning Post reports that Nokia and Ericsson are seeing profits decline as China looks to Huawei and ZTE for telecommunications solutions.
“Ericsson and Nokia were always going to find the Chinese carrier market challenging,” said Paul Haswell, a technology firm consultant from international law firm Pinsent Masons, “but this has intensified in the current environment.”
He added, “It is almost certain that China Unicom and China Telecom will follow the lead of China Mobile. They are all state-owned companies, so they’re expected to support Chinese technology and investment even without the trade war.”
China Mobile made a move last March, calling for a tender to supply 500 5G base stations. The SCMP speculates that China Mobile, the world’s largest wireless network operator, may push back against the U.S. ban on Chinese components by awarding the lion’s share of the tender to Huawei and ZTE. “Based on the results of China’s 5G trials last year and my channel checks, 5G equipment from Huawei and ZTE performed the best, followed by those of Ericsson and the Nokia,” said analyst Edison Lee. “So I won’t be surprised if Nokia didn’t win any share in China Mobile’s initial 5G tender.”
The industry has noted that Huawei has been amassing crucial U.S. components so that it will be positioned to support 5G expansion within China. “Given the U.S. export ban on Huawei, there is the risk that China’s 5G buildout may have to slow down because the country is not likely to rely as much on Nokia and Ericsson,” analyst Lee said. “If Huawei is out of the game, relying mainly on ZTE and Datang Telecom Group could be a risky strategy in case the U.S. government decides to impose an export ban on all Chinese telecoms equipment vendors to set back China’s 5G ambitions.”
November 19, 2019