Ericsson’s Chinese revenues could disappear in their entirety

Technology

A bleak picture is painted by (some) analysts of future revenues for Ericsson from China following the decision to ban Huawei from from building 5G networks in Sweden…

A bleak picture is painted by (some) analysts of future revenues for Ericsson from China following the decision to ban Huawei from from building 5G networks in Sweden.

Threats of retaliation from China caused Ericsson Chief Executive, Borje Ekholm, to reply “No, it’s not coming back.” when asked in an analyst call whether the revenue could be recouped and further warned that Ericsson was likely to gain “materially lower market share” in China in the future after last years ban on Huawei and ZTE due to security concerns.

Currently just under 10% of Ericsson revenues are generated in China and with preparations underway for the second phase of 5G build-out this could have increased, but CFO Carl Mellander is reported as saying “that tenders expected during the second quarter did not take place”.

In the second quarter, Ericsson revenues generated in China fell more than 60% from around E395m a year ago causing Ericsson’s overall group sales to drop for the first time in three years.

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