Ericsson and Nokia sell telecom equipment to China Mobile, the largest carrier of the world by subscribers. The participation of the two Nordic telecommunication companies on this multi-billion market indicates that China accelerates 5G deployment in the mainland.
China Mobile bought 153 MME and 231 SAE telecom equipment units from Ericsson and 56/60 similar units from Nokia China. The products of the Swedish company account for 34% of China Mobile’s total procurements of 5G networking equipment amounting to $2 billion.
The Chinese telecom operator received its 5G commercial licence (one of the four issued) on June 6. China Mobile aims to offer 5G commercial services in 40 cities by September, a year earlier than previously expected.
Giving a slice of pie of the mainland market to the largest global competitors of Chinese companies in 5G networking is particularly interesting in the line of the fact that Ericsson and especially Nokia are actualy benefitting from the Huawei ban and the trade war between China and the U.S. In the past, Huawei increased its market share in network development in Europe at the expense of the two aforementioned companies.
This contrast is most intentional. The potential 5G market in China is beyond huge, there is something for everyone. As the Asian giant intends to come out as the definitive winner of the fourth industrial revolution, the leadership speeds up mainland 5G construction and promotion. The primary applications of 5G are industrial; smart factories, self-driving cars, telemedicine, to name a few.
Awarding Ericsson and Nokia with multi-hundred million contracts may be also a message for the EU (especially for Germany) to leave Huawei and ZTE unmolested there. Industry experts estimate that the presence of the Chinese national champion company lowers the costs of 5G deployment by 20%. China benefits from market competition as well since it’s not uncommon that otherwise state-backed entities have to compete with each other on the same market.
It’s worth to note that U.S-based Qualcomm and Intel have also participated in the 5G technical test organized by China.