Ericsson Faces Loss of China Market Share

Ericsson Faces Loss of China Market Share

Foto: Ericsson

Ericsson warned it will face a higher risk of taking lower market share in China than it currently holds. The company reiterated concerns about Sweden’s decision to exclude vendors Huawei and ZTE from 5G rollouts.

Once again Ericsson addressed 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, the company reiterated concerns raised in its Q4 2020 financial report, which stated Swedish regulator 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 company explained.

Ericsson continues 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. Ericsson added that all this may have material and lasting adverse impact on their business.

More from category

Telefonica Posts Record Profit on Tower Sale

Telefonica Posts Record Profit on Tower Sale

31 Jul 2021 comment

Spanish based operator Telefonica raised its full year outlook after posting an all-time record net income.

Strong First Half for Nokia, 2021 Outlook Revised Upwards

Strong First Half for Nokia, 2021 Outlook Revised Upwards

31 Jul 2021 comment

Nokia's net sales grew 9 percent on constant currency in the second quarter of 2021.

Samsung's Revenue Went Up 20 Percent in the Last Quarter

Samsung's Revenue Went Up 20 Percent in the Last Quarter

30 Jul 2021 comment

During the second quarter of 2021, Samsung made a net profit of KRW9.6 trillion ($8.4 billion), up from KRW5.6 trillion in the same period last year.