Tech News | Huawei’s Troubles Might Be A Big Opportunity For Ericsson And Nokia

Huawei’s Troubles Might Be A Big Opportunity For Ericsson And Nokia
For nearly two decades now, the China’s Huawei Technologies Co has been dominating the global telecom market. No doubt they had managed to stay on the top that long with their attractive prices and a mix of sophisticated technology.
It's rise squeezed the Ericsson AB and the Nokia Oyj, which both responded by cutting jobs and as well making acquisitions.
However, tables are turning to Huawei's bad side as they are at the centre of the US-China trade war. 

Nokia and Ericsson, though fierce rivals themselves, have wrested long-term deals from Huawei to build the 5G wireless networks, enabling everything from autonomous cars to robot surgery.
According to analysts, Huawei grapples with the US export ban and restrictions from other governments concerned with their devices and it could enable Chinese espionage.
"Huawei will, for the foreseeable future, face a broader cloud of suspicion," said John Butler, an analyst at Bloomberg Intelligence in New York. "Nokia and Ericsson are well positioned to benefit."
In May, the two European companies both won 5G contracts from the SoftBank Group Corp.’s, a Japanese telecom unit, hereby replacing both Huawei and Chinese peer ZTE Corp. 
Ericsson also signed a similar pact in March with Denmark’s biggest phone company, TDC A/S, which had worked with Huawei since 2013 to modernize and manage its network.

Other carriers who are also expecting government curbs on Huawei, have started removing their equipment from sensitive parts of their systems. 
The BT Group Plc is taking Huawei out of its network core while Vodafone Group Plc has suspended core equipment purchases from Huawei for its European networks. 
Even the Deutsche Telekom AG, which has Huawei throughout its 4G system, is also re-evaluating its purchasing strategy.

Dozens of phone companies, including the Canada, France and Germany based ones are planning to choose 5G suppliers in the coming months, Samsung Electronics Co. and Cisco Systems Inc. are also vying for deals. 
However the key beneficiaries of Huawei’s difficulties are likely to be the two Europeans, which compete directly with the Chinese company in supplying radio-access network equipment.

The Trump administration has been pushing allies to bar Huawei from the 5G network since last year, citing risks concerning the state spying, an allegation which the company has denied.
The May move to block Huawei’s access to U.S. suppliers escalated the campaign, and the company’s founder, Ren Zhengfei, now predicts the U.S. sanctions will cut its revenue by $30 billion over the coming two years.

Even outside the United States, security concerns have led Australia, Taiwan and Japan to bar Huawei from 5G systems. The Chinese company also risks losing meaningful work in Europe and emerging markets where countries could follow with their own limits, according to Bloomberg Intelligence.
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