The head of Swedish telecoms giant Ericsson, Börje Ekholm, is ratcheting up pressure on the government to reconsider its decision to ban China’s Huawei from taking part in the rollout of 5G networks.
According to a report in Sweden’s TheLocal, The Swedish Post and Telecom Authority announced it was excluding Huawei and ZTE, both from China, from its 5G frequency auction in late October, citing security concerns.
According to sources, much like it has done in the rest of the world, the US has put pressure on Sweden to exclude Huawei from its 5G network construction.
Equipment already installed from the Chinese manufacturers must be removed by January 1, 2025.
“I hope there will be no impact,” Börje Ekholm told daily Dagens Nyheter in an interview, adding that he is worried about Chinese reprisals, TheLocal reported.
“China accounts for eight percent of our revenue. For us it has been a strategically important issue to be present in China,” Ekholm added.
Over the weekend, the newspaper published text messages between Ekholm and Swedish Trade Minister Anna Hallberg in which he asked the government to “talk” with the telecoms regulator.
“At the moment Sweden is a really bad country for Ericsson,” Ekholm complained to the minister.
The PTS decision “excludes our Chinese competitors in a way that no other EU country has done,” he said in SMS messages obtained by the daily, The Local reported.
After the UK in mid-July, Sweden became the second European country and the first in the European Union to explicitly ban Huawei from almost all 5G infrastructure.
Huawei has taken the Swedish regulator to court over its decision, leading to the 5G auction being delayed, and Beijing has warned that the authority’s decision could have unspecified “consequences” for Scandinavian companies in China, The Local reported.
In his interview, Ekholm called the Swedish decision “a complication” for Ericsson, but said he still wanted it to remain Swedish.
“Our soul is in Sweden, it’s Ericsson’s base.
“But if Sweden doesn’t support free trade it is a complication for us,” he said, while noting that “we make 99 percent of our turnover outside Sweden.”
Would Ericsson leave Sweden? Is it realistic?
Zhang Xiaorong, director of the Beijing-based Cutting-Edge Technology Research Institute, told Global Times, “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 said.
Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, said that it would 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,” he told Global Times.
“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 companies and Chinese technology today under US pressure, will they ban EU firms tomorrow?”