Sweden-based Ericsson (NASDAQ: ERIC) confirmed it “remains committed to its customers in mainland China” after a local media outlet reported otherwise. According to the South China Morning Post, Ericsson has been losing market share to domestic manufacturers.
One competitor, Huawei Technologies, secured 52 percent of China Mobile’s 5G contracts, totaling $574 million. Another rival, ZTE, won 26 percent of contracts. That left Datang, Nokia, and Ericsson to split the remaining 22 percent of the pie.
The Post reported that Ericsson faces geopolitical tensions with China after Stockholm banned Huawei equipment for 5G rollout. The ban was passed in 2020, and operators have until January 1, 2025, to remove Chinese gear from their infrastructure and core functions.
“Further changes in economic and political policies in or relating to China [may] have a material adverse effect on the company’s business,” Ericsson wrote in a recent financial report. In 2023, Ericsson’s net sales fell by 10 percent year over year, and the company also implemented a five percent headcount reduction.
According to Börje Ekholm, Ericsson president and CEO, the company “navigated a difficult mobile networks market” in 2023 and expects “to continue to take out costs during 2024.”
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