Ericsson suffers slump over rift between Beijing and the West

    Following Sweden’s move to ban Chinese equipment giant Huawei, Ericsson claims it is no longer expecting contract wins for 5G tenders in China, sending its shares down more than 8 percent.

    STOCKHOLM — The telecoms company currently generates just under 10% of its revenues in China and, despite the country preparing for the next round of a massive 5G build-out, Chief Financial Officer Carl Mellander says they are expecting a lower market share.

    European governments have been tightening controls on Chinese companies building 5G networks following diplomatic pressure from Washington, which alleges Huawei equipment could be used by Beijing for spying.

    Huawei has repeatedly denied being a national security risk.

    “The investor base is likely to tire of Networks consistently carrying the can for under-performing digital services,” writes Sandeep Deshpande, Head of the European Technology team at JPMorgan, in a research note.

    “… Questions are going to arise whether a rethink of the Digital Services portfolio is required especially as China could remain a drag there (too).” (MP/The MiNT)

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