Ericsson’s future in China hinges on Sweden’s 5G decision
Published: May 20, 2021 09:08 PM
Illustration: Tang Tengfei/GT

Illustration: Tang Tengfei/GT

After the ban imposed by Swedish government last October, Chinese 5G gear maker Huawei has sued to overturn the discriminatory decision. A verdict, which will influence not only Huawei but also Sweden-based telecom provider Ericsson, is expected to be announced soon.

In sharp contrast, while Chinese 5G vendors Huawei and ZTE are banned in the 10-million-people market of Sweden on the grounds of baseless security risk accusations, Ericsson has been enjoying a fair and open market in the 1.4-billion people market of China, and lately obtained an "interview" chance to enter China's 5G market by participating the country's 5G equipment test.

Such drastic imbalance of cooperative pattern is clearly unsustainable, and the 1.4 billion Chinese people won't accept the bullying of Chinese firms, while witnessing Swedish businesses thriving in the huge Chinese market.

Sources close to the matter have revealed that an "interview" opportunity does not mean that Ericsson's equipment will be used in China's 5G rollout, signaling that the future of Swedish vendor is uncertain, amid Sweden's vicious assault on Chinese firms which damages their interest and goes against rules of World Trade Organization.

As for Ericsson, what's more important may not be the short-term revenue in the Chinese 5G market. China has been leading the world in 5G deployment, from 5G basic research, basic station rollout, and related software and application development. Losing the market could mean a big blow for Ericsson.

It seems that Ericsson itself is fully aware of the significance to maintain a scenario of free and fair competition. "It may be painful shorter term but longer term it drives us to be more innovative and make better products for our customers," Ericsson CEO Borje Ekholm once commented on the Huawei ban in Sweden.

Unfortunately, the Swedish 5G vendor has been dragged into a geopolitical confrontation orchestrated by the Sweden government. With Chinese firms starting to lead many new technologies now, it has unnerved the US and the Western world, which fret about losing its traditional technology hegemony. Aiming to suppress China's economic development, Washington has been assaulting Chinese firms, including Huawei.

By penning fiction which cites the groundless national security risks and lobbying other countries to take sides against Chinese enterprises, US government is now focusing on blocking technology development in China.

Sweden needs to think seriously about its position in the 5G arena. It could choose to continue to cooperate with China in development of this important telecom and internet technology.

China has rolled out around 820,000 5G base stations, accounting for more than 70 percent of the total developed 5G stations in the world. Chinese firms have been leading the patent application among global players, and their applications have already exceeded 9,000.

With a prominent industrial capacity, 5G will boost network investment up to 1.2 trillion yuan ($186.4 billion) by 2025, and will directly bring in economic added-value of 2.93 trillion yuan, said Liu Liehong, vice minister of China's Ministry of Industry and Information Technology.

The once-in-a-generation good opportunity is in front of Ericsson. It is hoped that the Swedish government can make the same efforts that China has made: offering a fair,  open and non-discriminative business environment for all businesses. 

The author is an editor with the Global Times.