Huawei’s Rivals Nokia and Ericsson Can’t Capitalize on U.S. Scrutiny

U.S.-led scrutiny of Huawei should have been good news for its two biggest competitors in the telecommunications-equipment business, Finland’s Nokia and Sweden’s Ericsson – but it isn’t turning out to be so simple, Wall Street Journal informed.

Major European wireless providers say Nokia and Ericsson have been slow to release equipment that is as advanced as Huawei’s. Nokia and Ericsson also face a new, deep-pocketed challenger in Samsung, the South Korean smartphone giant that is aiming to quickly grow its nascent cellular-infrastructure business.

And there is another big pitfall for the two: Both Nokia and Ericsson fear that if they are seen trying to take advantage, Beijing could retaliate by cutting off access to the massive Chinese market, people familiar with the matter said, the Journal adds.

In recent years, Huawei has surpassed the Nordic companies to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment. For the first three quarters of 2018, Huawei had a 28% share of the global telecom-equipment market, Nokia had 17% and Ericsson 13.4%, according to research-firm Dell’Oro Group. That compares with market shares in 2017 of 27.1% for Huawei, 16.8% for Nokia and 13.2% for Ericsson.

According to the Journal, Huawei has dominated the world-wide industry despite being essentially barred from the U.S. over concerns that Beijing could order Huawei to spy on or disable communications networks. Recently, the U.S. has been urging allies to enact similar bans.

Governments and wireless providers in Australia, France, New Zealand and other countries are avoiding Huawei after saying the concerns are legitimate. Huawei says it is employee-owned and has never done espionage or sabotage on behalf of any government.

Major European wireless carriers that already use Huawei say switching to a different company would add both costs and complexity, since it would require training people to deal with different technology, the Journal noted.

Executives at one major British wireless carrier say Huawei can deliver products nearly a year before Nokia and Ericsson can offer hardware with comparable technology. They said they were telling U.K. officials, who plan to decide by spring 2019 whether to exclude major Huawei equipment from the country, that blacklisting Huawei could delay by nine months the U.K.’s launch of 5G, the coming generation of superfast wireless technology.

A Nokia spokesman said the Finnish company is already selling cutting-edge technology in leading 5G markets, including the U.S., and has the advantage of being able to sell its products “to the entire global market.”

An Ericsson spokesman said the company is focused on providing the best products and that “the competitiveness of our technology is what matters.”

The two Nordic providers, though, come with something Huawei now lacks – a seal of approval from much of the West’s national-security establishment. Nokia and Ericsson representatives have advised the U.S., Canadian and British governments over cybersecurity issues, according to people familiar with the matter, who say the talks are part of normal government relations.

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