Ericsson warned that its economic interests in China may be at risk due to the decision by Sweden’s Post and Telecommunication Authority (PTS) to exclude Chinese vendors’ products from 5G networks in Sweden. The financial disclosure warning comes as Ericsson is currently in the process of issuing a EUR 500 million unsecured 8-year bond.
Ericsson notes that it has been invited to various ongoing tender processes in China, the final outcome remains uncertain and it is the company’s current assessment that the risk has increased that Ericsson will in those tenders be allocated a significantly lower market share than its current market share.
“The geopolitical situation can have consequences on the entire industry, with an increased likelihood of further industry split, separation of global value chains and separation of global standards for mobile telecommunications. This overall development has also led to several countries evaluating how to ensure uninterrupted access to telecommunication network infrastructure, for example through promoting disaggregation of the Radio Access Network and support of national communication network infrastructure champions as alternative to the established global vendors such as Ericsson although the timing and extent of this remains unclear.”
