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Ericsson's call contrasts with Sweden's myopia: China Daily editorial

chinadaily.com.cn | Updated: 2021-01-03 20:31
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A visitor passes the Ericsson booth during the Mobile World Conference 2019 in Shanghai on June 25. [Photo/China Daily]

Borje Ekholm, chief executive officer of Swedish telecommunications giant Ericsson, has been lobbying the Swedish government to repeal a ban that prohibits Huawei and ZTE from participating in the country's 5G network construction.

According to reports by Dagens Nyheter, a Stockholm newspaper, Ekholm said Ericsson would leave Sweden if the authorities continue to uphold the ban, as "Sweden is a very bad country for Ericsson". He was referring to an order by the Swedish Post and Telecom Authority in October that operators remove equipment of the two Chinese telecom companies from existing 5G network infrastructure by January 2025 due to national security concerns.

For Ericsson, which is headquartered in Stockholm and employs 13,000 people, to leave its base for the past 140 years may sound a little far-fetched. But the strong reaction of the chief of Ericsson underscores how much damage the Swedish government has done to the principle of free trade with the ban.

"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," Ekholm said.

The insight is laudable, especially given that Ericsson stands to benefit directly from the two Chinese companies being pushed out of the markets in Sweden and other countries in Europe — by taking over the market shares of its major rivals.

But as a successful businessman, Ekholm understands the importance of free competition and an open market, without which no company can thrive. "With a bridge like ours, you fully understand why there are so few technology companies in Europe," he observed in his message to Swedish Trade Minister Anna Hallberg.

Actually, Ericsson has been a major beneficiary of China's increasingly open market, even though it faces competition from Chinese companies such as Huawei. The Swedish company reported a sales surge in China in the third quarter, boosting its year-on-year revenue in the North East Asia region by nearly 40 percent. Its executives said its China operations had turned profitable a few months after Ericsson landed a $593 million 5G deal with China Mobile, the world's biggest operator by customers.

It is deplorable that the Swedish government has intentionally deviated from the European Union's guidelines on secure 5G networks — which aim to balance the need for national security with free competition — by completely expelling the Chinese telecom companies from its networks. By toeing the line of the United States in its efforts to strangle Chinese high-tech companies globally, politicians in Sweden have debased the country to the role of being a geopolitical pawn of Washington. The short-sighted move, which tramples upon market rules, will eventually cost all players dearly and serves no party any good.

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