China Mobile awarded a network contract valued at $1.16 billion to the country’s major equipment vendors Huawei and ZTE. Previously-invited foreign vendors Ericsson and Nokia have been left out, showing another geopolitical strain between the West and China.
This seems like a response to Western countries banning Chinese vendors from their network innovations. Huawei and ZTE reportedly submitted similar bids of CNY7.49 billion and CNY7.46 billion, respectively. The move by China’s largest mobile operator to not give the two non-Chinese vendors a chance in its latest 5G tender came as a surprise as three months ago, both vendors have participated in the 700 MHz 5G network procurement.
During this time, contracts had been won by Huawei, ZTE, Datang, Nokia, and Ericsson — with the latter two only getting 4% and 2% of the overall shares, accordingly. This is Nokia’s first 5G radio contract win while Ericsson loses ground. In fact, Ericsson shares have collapsed under pressure from the China situation in July.
In spite of Ekholm declaring the company’s plan to double down in China, Ericsson is reportedly shutting down one of its five R&D centers in the country by November.
The lack of competitors in the latest 5G tender gave an edge to the two prominent Chinese telcos. Both have secured the bulk of three contracts to provide 700 MHz base stations for China Mobile and China Broadcasting Network, with Huawei’s business growth continuing despite US government sanctions.