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Ericsson chief warns Huawei fears will add to Europe’s 5G delay

5G networks

Ericsson chief warns Huawei fears will add to Europe’s 5G delay

Focus on Huawei, regulation and high costs risk region falling further behind, says Börje Ekholm

Security worries about Chinese telecoms company Huawei risk further hampering Europe’s lagging efforts to build 5G networks, the boss of Ericsson has said.

The Swedish company and its Nordic rival Nokia are seen as a potential beneficiaries if European governments ban Huawei equipment from 5G projects after the US filed charges of corporate theft and violating Iran sanctions against the telecoms equipment maker.

But Börje Ekholm, chief executive of Ericsson, argued that the Huawei tensions had caused paralysis among European operators. “Right now we are at risk of focusing on only one question. All our customers are trying to work out what this means and that is causing uncertainty.”

The GSMA, the mobile industry trade body, issued a warning last week that did not name Huawei but said the debate about equipment and a potential ban could increase costs for European operators, businesses and citizens, jeopardise the functioning of existing 4G networks and delay the launch of 5G networks “for years”.

If we are afraid of competition, innovation will stand still

Börje Ekholm, chief executive of Ericsson

However, Mr Ekholm argued that “heavy” regulation and the costs of buying mobile spectrum were “more important factors” that had left Europe lagging behind on 5G.

“Why are we letting other countries get ahead of Europe,” he said, referring to the new wireless network as critical national infrastructure.

In Europe, 5G is largely still being tested where other countries are further on, according to Mr Ekholm. “It is full steam ahead in the US. There is no hesitation. It is full steam ahead in Australia and in Asia. We sit here in Europe and the majority of countries have not even sold spectrum yet. You are not creating a positive investment environment in Europe and that is the problem,” he said.

He said the problem was not just with 5G but that coverage and density for 4G networks was much lower than in China and the US. “Europe used to lead the world in wireless development but today, as a continent, we do not . . . It is not a surprise that the web-based digital companies have emerged in Asia and the US where 4G is stronger,” he said. “Now [in Europe] we see operators more as a source of tax revenue.”

A ban on Huawei would hurt competition and potentially innovation, according to Mr Ekholm but he rejected the notion, expressed by some networks, that the Chinese company had more advanced 5G equipment. Ericsson’s equipment was used in live 5G networks, he said, and the company had signed 10 deals and 42 memorandums of understanding with global networks. It had also shipped 3m 5G-ready radios to customers worldwide.

“If we are afraid of competition, innovation will stand still,” he said.

He is also concerned by the trade tensions between China and the US. “We’re a Swedish company with a tiny home market. We have always been reliant on global trade. We are now in 180 countries. My frustration is that if that pattern changes then of course this would have a big impact on us as well,” he said.

This story has been updated to clarify that Mr Ekholm believes banning Huawei would hurt competition.

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