The advent of 5G networks has accentuated U.S. concerns about lacking a domestic rival to the mighty Huawei Technologies Co. Ltd.
Yet the Chinese telecoms equipment maker¡¯s main competitors, Ericsson AB and Nokia Oyj, have good reason to be relieved that they are domiciled in Sweden and Finland respectively. U.S. President Donald Trump¡¯s administration has spent much of the past two years cajoling other countries into banning gear made by Huawei from their networks. Had the two Nordic firms been U.S.-based, they would likely have been subject to retaliatory bans in China.
That would have had dramatic implications for their earnings. Ericsson¡¯s northeast Asia region, which includes China, was the only market to deliver meaningful growth for the company in the three months through September, with revenue jumping 39% to 8.8 billion Krona ($1 billion). Group sales would otherwise have declined. We¡¯ll see what happens with Nokia when it reports third-quarter earnings on Oct. 29.
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