European network vendors have been facing fears that the US-China trade wars might lead to Chinese operators relying more heavily on their homegrown suppliers, as the country seeks greater hi-tech self-sufficiency. That could mean lower sales for Nokia and Ericsson as well as actual US vendors. So they will have been relieved to be able to announce new 5G contracts from the three Chinese operators, which have switched on their first 5G services and are rapidly expanding their networks.
Nokia said it had won contracts worth a total of CNY15.7bn ($2.2bn) from China’s MNOs, while Ericsson has also won deals, though has not revealed the value.
Nokia’s win includes 5G cooperation framework deals for 2020 with China Mobile, China Telecom and China Unicom. These cover end-to-end network equipment and services for 5G, ultra-broadband, core networks, optics, IP, software and managed services, it told Mobile World Live.
The news service China Daily was quick to praise the country’s “open attitude to all international players”, contrasting this with the actions of the USA and Australia in banning Chinese vendors from bidding for 5G deals.
Those vendors continue to defend themselves against charges of cybersecurity and trade sanctions breaches, which have been used as the reasons to bar them from US contracts, and to insist that they can still thrive even without 5G deals from the USA and some of its allies.
Huawei claimed last week that its direct contribution to European GDP was €2.5bn in 2018, and that it boosted the overall European economy by €12.8bn through its economic activity in the same year. It also cited calculations from Oxford Economics that said it enabled 169,700 jobs in the region last year, directly or through the supply chain.
Compared to 2017, it said, its GDP contribution was up by 19% in real terms, the number of jobs it supported rose by 13%, and its tax contributions by 17%.
“The new European Commission wants to deliver digital sovereignty for the EU by establishing a strong technological ecosystem across the continent. This report clearly shows Huawei to be among the top companies in Europe innovating the products and services that will help the EU accomplish its targets,” commented Abraham Liu, Huawei’s chief representative to the EU Institutions.
“We are making a sizeable contribution to the EU economy, helping Europe improve productive capacity and ensuring its firms and industries are not left behind by the pace of digital transformation. Our aim now is to help the European Commission achieve its goal of making Europe ‘fit for the Digital Age’,” he added.
Such pronouncements are becoming common practice from Huawei executives as the firm continues to try to persuade European governments not to bow to US pressure to bar Chinese suppliers of 5G and other critical digital infrastructure.
Oxford Economics’ report broke Huawei’s overall GDP contribution of €12.8bn in 2018 into:
- Direct €2.5bn contribution, from operational expenditure at its sites across the EU, Iceland, Norway, and Switzerland.
- A €5.4bn indirect contribution along the supply chain through procurement of goods and services from suppliers in the 12 European countries from which Huawei purchases the most.
- An induced contribution of €4.9bn, capturing the wider economic benefits arising from payment of wages by Huawei, and by the firms in its supply chain.
Meanwhile, Huawei’s smaller compatriot, ZTE, claims it will be a highly valuable partner for operators in many markets because of its deep learnings from supporting Chinese deployments. Maggie Chui, VP of wireless marketing and strategy, said in a recent interview that ZTE has LTE market share in China of over one-third, and expects “our 5G market share will be commensurate with our 4G share”.
Its strength in its home market, often cited as a ZTE weakness, is an essential proof point for the 5G era, she argued, demonstrating the company’s ability to build “hundreds of thousands or even millions” of base stations, many in complex scenarios, along with advanced digital and virtual platforms. While many European operators are only deploying 5G base stations “in the hundreds”, she pointed out that China is likely to have 600,000 deployed by the end of 2020.