China Aims to Reduce Dependence on Western Technical Infrastructure and Undermines Nokia and Ericsson Through Lengthy Contract Reviews
China is imposing increasing restrictions on European telecom suppliers Nokia and Ericsson. According to sources at The Financial Times, contracts from the Swedish and Finnish groups must first receive approval from the Cyberspace Administration of China (CAC). The companies are not given insight into how their equipment is being evaluated.
This process can take up to three months. They make foreign bids uncertain and slow, giving Chinese competitors without such controls an advantage. Even when approval is eventually granted, the delay is often enough to lose market share. Both companies report a decline from twelve percent in 2020 to four percent last year.
Mirror Image of Europe
The situation is notable because European countries themselves wanted to ban Huawei and ZTE several years ago. However, only 10 of the 27 EU countries have implemented restrictions. Huawei and ZTE still maintain 30 to 35 percent of the European market, with Germany being the largest customer.
While China may be building restrictions for European suppliers, Europe apparently remains divided over harsh measures against Chinese players. This causes concerns for European companies: losing market share in China while Chinese competitors largely maintain access to the European market.