Helsinki (AFP)
Bargain or poisoned gift? Apparent beneficiaries of restrictions on access to 5G suffered by the Chinese equipment supplier Huawei, its Nordic competitors, Nokia and Ericsson, will have to roll up their sleeves to meet demand, analysts warn.
Britain limited access to its 5G networks on Tuesday to protect "at risk" telecom equipment manufacturers, and the EU followed suit, urging member states to avoid relying on "high risk" providers.
Neither London nor Brussels have specifically targeted the Chinese giant Huawei, accused by Washington of spying on behalf of Beijing, which it firmly denies. They have not excluded it from the networks either, but their decisions open up prospects for the two main competitors of the Chinese company, the Finnish Nokia and the Swedish Ericsson.
Nokia praised the EU's cybersecurity guidelines and commitment on Friday.
Ericsson welcomed in a press release the "comprehensive approach" adopted within the EU and said it was "ready to support this process to ensure a high level of protection for European citizens and businesses".
But for observers, it may not be so simple for these equipment manufacturers to meet the increased demand created by the partial exclusion of Huawei, the market leader.
The Chinese group is widely regarded as the most advanced supplier in terms of 5G, with a technology allowing ultra-fast data transfers, necessary for autonomous driving cars and remote-controlled robots in factories or operating rooms.
- Global concerns -
"There needs to be a discussion of Huawei's leadership position and the readiness of Nokia and Ericsson to achieve it over the next three years," said Howett. "Can they provide network operators with the equipment they need on time?" He asked.
In 2019, Nokia lowered its forecast for this year due to fierce competition in the 5G market, while its CEO Rajeev Suri minimized the company's delays in delivering certain equipment orders.
Any difficulty in meeting demand will be felt by European consumers, warns Neil Mawston, smartphone analyst at Strategy Analytics.
Great Britain and the EU are not the first powers to act vis-à-vis Huawei, in the crosshairs of Washington which completely prohibited it from participating in the deployment of the fifth generation mobile network in the United States. In 2010, the Indian government banned the import of Chinese telecommunications equipment for several months, following a dispute over hacking.
Telecommunications analyst Anders Elgemyr of the investment bank Carlsquare believes that operators are starting to keep away from Huawei, in favor of Ericsson and Nokia, for fear of scaring customers away. "If you lose customers because you use Huawei equipment, then you avoid them," said Elgemyr at AFP.
Friday, one of the largest mobile operators in Europe, Orange France, chose Nokia and Ericsson for the deployment of 5G networks throughout the country. However, the battle for contracts in Europe remains fierce: Orange has used Huawei in its other markets.
In Germany, the Chinese company won a contract to supply 5G to Telefonica.
In mid-January, Ericsson told AFP it had signed a total of 79 contracts for 5G while Nokia announced 63. With AFP, Huawei reported in December of 65 orders.
According to Elgemyr, Huawei could target Asian, South American, as well as the Middle East and Africa markets - which in turn could put further pressure on Nokia. Others accuse Huawei of receiving disproportionate state aid compared to its competitors.
An analysis by the Wall Street Journal revealed that between 2013 and 2018, the Chinese group received 17 times more public money than Nokia, while Ericsson did not.
- Political struggle -
Knowing who will benefit from the new regulations in the long term will depend on their implementation.
"Will the 35% limit set by the United Kingdom (...) be a flexible guideline or a final judgment?" Questions Neil Mawston, in reference to London's decision to limit market share of Huawei at 35% in non-strategic infrastructures such as relay antennas.
Unlike the United States, Britain has used Huawei technology in its systems for 15 years.
US officials are adamant: they see "no safe option" for Huawei's participation in the network, and British and European plans to exclude at-risk operators from "sensitive" locations such as nuclear sites and military bases did not convince them.
"This political showdown on 5G will continue for the rest of the decade," said Mawston.
© 2020 AFP