Ericsson warned it faces a higher risk of being allocated lower market share in China than it currently holds, as it reiterated concerns about its home market Sweden’s decision to exclude vendors Huawei and ZTE from 5G rollouts.
The company again addressed [1] the China-Sweden issue in an updated prospectus for investors related to Ericsson’s issue of a €500 million unsecured eight year bond.
In its statement, Ericsson reiterated concerns raised in its Q4 2020 financial report, which stated Swedish regulator Post and Telecommunication Authority’s (PTS) decision to exclude Chinese vendor products from domestic networks may adversely impact the economic interests of the nation and its industries, including those of Ericsson.
Ericsson noted being headquartered in Sweden meant the PTS decision would have special relevance and there was a risk China would retaliate.
“While Ericsson is invited to various ongoing tender processes in China, the final outcome remains uncertain and it is the company’s current assessment that the risk has increased that Ericsson in those tenders be allocated significantly lower market share than its current market share,” the vendor explained.
Ericsson continued to state the geopolitical situation could have consequences on the entire industry, with “increased likelihood” of further splits, and separation of global value chains and global standards for mobile telecoms.
A harder stance by governments on certain vendors had also led to “several countries” looking at how to ensure uninterrupted access of network infrastructure, for example through promoting disaggregation of the RAN, in addition to supporting national companies as alternatives to global vendors, all of which “may have material and lasting adverse impact on our business”, Ericsson added.
[1] https://www.mobileworldlive.com/featured-content/home-banner/ericsson-warns-on-china-reprisal-risk-from-huawei-ban
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