Ericsson chief hits out at Swedish 5G ban on Huawei

Ericsson’s chief executive has criticised the decision of his home country Sweden to ban Huawei from its 5G telecoms networks, arguing such a move restricts free competition and trade and will lead to a delay in rolling out the new technology.

Huawei, the Chinese telecoms equipment manufacturer, is appealing against the ban, which was made last month by Swedish authorities on advice from its armed forces and security services who accused China of “extensive intelligence gathering and theft of technology”.

Borje Ekholm, chief executive of Swedish rival Ericsson, told the Financial Times that it was “important that those type of decisions are reviewed”.

He added: “For Ericsson and Sweden, we’re built on free trade. We’re built on the opportunity to trade freely . . . From my perspective it is important that we have open markets and free competition.”

Sweden’s ban was unusual in being so explicit with its reasoning, with other countries such as the UK having referred more vaguely to general national security concerns. Telecom operators in Sweden are barred from using Huawei or ZTE products in their new 5G installations and have to remove their equipment from their existing infrastructure for core functions by 2025.

Mr Ekholm said that he understood that mobile networks are a national security question and would “increasingly be so”.

But he argued that Sweden had deviated from the EU’s guidelines on secure 5G networks, which aim to balance the need for national security with free competition. “I do think that framework is a good one. This is their own interpretation of the toolbox,” he added.

The appeal has already caused Sweden’s telecoms regulator to postpone an auction of 5G spectrum this month and Mr Ekholm said he expected the overall rollout of the new telecoms networks to be delayed.

Ericsson and Finland’s Nokia are Huawei’s biggest rivals, but as the Swedish group has a relatively large business in China, some analysts have suggested it could try to protect that by refusing to align itself with Stockholm.

Mr Ekholm noted that while Ericsson competed “heavily” with Huawei, it also collaborated with them on industry standards. “It’s important to maintain that,” he said.

Ericsson’s chief executive added: “I belong in that category that believes competition makes us longer term a better company. It may be painful shorter term but longer term it drives us to be more innovative and make better products for our customers.”

Ericsson has been more successful than Nokia in the early days of the 5G rollout and has won several deals in China. Both companies have become part of a geopolitical tussle with some officials close to US president Donald Trump suggesting that America should consider taking a stake in one or both of them.

Mr Ekholm argued the political focus in Europe should be on rolling out 5G as fast as possible. “Think about 4G — the debate in Europe was: what is the killer app? The Americans and Chinese rolled out 4G fastest and the app economy for consumers is now dominated by American and Chinese firms,” he said. “5G is going to be the same but for enterprise. Slowing the rollout of 5G is a risk for the economy. Europe risks falling behind again.”