Wednesday, 22 September 2021

Ericsson staves off market share collapse in China with latest 5G win

by Harry Baldock, Total Telecom
Monday 02 August 21

According to anonymous sources, Ericsson has won a 3% share in a 5G radio contract from China Telecom and China Unicom

Today, media reports are suggesting that Ericsson has managed to retain at least some of its considerable market share in China, somewhat abating fears that the company would miss out completely on the latest batch of 5G contracts.  Anonymous sources suggest that the Swedish vendor giant has won a 3% share in the latest 5G radio equipment tender from China Telecom and China Unicom…

Today, media reports are suggesting that Ericsson has managed to retain at least some of its considerable market share in China, somewhat abating fears that the company would miss out completely on the latest batch of 5G contracts. 

Anonymous sources suggest that the Swedish vendor giant has won a 3% share in the latest 5G radio equipment tender from China Telecom and China Unicom. China’s domestic vendors – Huawei, ZTE, and Datang Telecom – are expected to have won the largest shares of the contract.

Ericsson’s uncertainty surrounding the Chinese market began last year, when its home nation, Sweden, banned Huawei and ZTE from participating in the country’s upcoming 5G networks. Legal battles followed for many months, but the ban was ultimately upheld.

Throughout this process, Ericsson became an unlikely ally to rival Huawei, vocally opposing the ban due on the grounds that it was contrary to free market principles. 

But Ericsson also had other concerns surrounding the ban, namely that China would retaliate by clamping down on the vendor’s business in the country. At the time, around 10% of Ericsson’s revenues were generated in China, with the vendor warning that they were likely to see this share shrink as a result of the Swedish Huawei ban.

Indeed, such fears were proven to be grounded in truth when, in July, the vendor announced that its share of China Mobile’s equipment contracts had sunk from 11% to 2% over the last year. Nokia, meanwhile, had increased their market share to 4%. 

But this latest contract in the Chinese market, which covers the deployment of thousands of mobile base stations, should go some way to steady the ship, reassuring Ericsson that it still has a long-term role to play in China. 

For rival Nokia, this decision will be something of a disappointment, with the Finnish vendor widely expected to gain market share in China at Ericsson’s expense, as they did in the first phase of the equipment tender process back in July. 

 

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