UK could help Nokia and Ericsson with capital investment to replace Huawei?
In January, the UK announced that it would allow the carriers to use Huawei’s networking gear, although in a restricted extent, but they reversed the decision last week and said that the carriers will have to remove Huawei’s equipment from their networks by the end of 2027. Since the equipment needs to be replaced, it will slow down the 5G deployment in the country, the cost for the carriers will shoot up, and that is altogether a different story.
Coming back to the topic, Oliver Dowden, Secretary of State for Digital (UK) said that the UK needs to protect Nokia and Ericsson as they do not want to risk losing another telecom equipment maker. Also, probably because the UK telecom market is now a duopoly. The UK will assess the “capital position” of both the companies, and accordingly, it will decide on further steps.
He adds that UK will also launch a task force to “turbo-charge” UK’s telecom diversification, which will include bringing in new vendors to the market and initiating projects to make networking gears of different vendors work together (OpenRAN).
Assessment of the “capital position of Nokia and Ericsson” could also mean the UK supporting the companies by buying stakes in them. Not to be forgotten, acquiring stakes in Nokia and Ericsson was also a proposed solution by the US to solve its urgent 5G problem, which is to reduce its reliance on other companies and create a 5G company in its homeland for the adoption of secure wireless communications technology, as per the research firm Edge.
Meanwhile, to Nokia and Ericsson’s relief, Wang Wenbin, Foreign Ministry Spokesperson, China on July 21, quashed all the reports that said China plans on barring Nokia and Ericsson from exporting the products made in China to other countries, if the EU moves to ban Huawei’s 5G. He said,
“It was groundless rumor and malicious fake news. If you trace the European reports to their origin, you’ll end up with a Wall Street Journal story quoting so-called “sources”. The sole purpose of fabricating such fake news is to sabotage the good cooperation between China and Europe.
I would like to reiterate that China’s position on 5G is consistent and clear. China’s 5G market is open to global telecom companies including European ones like Nokia and Ericsson, who have already won the bid in Chinese projects. We oppose the erroneous practice of stretching the national security concept and defying international trade rules to exclude certain companies of particular country. We also hope that European countries will provide a fair, just, open, and non-discriminatory business environment for Chinese companies.”
However, for the networking companies, the path ahead looks quite turbulent because of the current geopolitical situation.
