October 20—The Swedish Post and Telecom Authority (PTS) mandated that networking equipment made by Huawei or ZTE cannot be utilized in the country’s 5G network infrastructure. The nation’s defense services determined the Chinese corporations’ network equipment could affect national security if used in local networks.
Sweden follows the United States, Australia, Britain, and France in barring Huawei made components from its 5G networks.
Breaking Down Sweden’s Huawei
In 2019, PTS stated it would conduct an auction of the nation’s 3.5GHz and 2.3GHz spectrum in early 2020. Because these frequencies are essential to 5G connectivity, the public sale winners would have the resources necessary to establish the countries fifth-generation mobile data network infrastructure. But the government agency delayed its plans to allow Swedish Armed Forces and security services to assess the project.
Post review, PTS announced local providers would be barred from using Huawei or ZTE gear in Sweden’s 5G build-out.
The region’s security services asserted the Chinese government could subvert equipment made by the Sino corporations. In July, British officials also barred Huawei made products from its networking infrastructure for national security reasons.
As of this writing, neither Huawei nor ZTE have responded publicly to the Swedish ban. In the past, the former company has denied accusations of government subversion and stated its gear is secure.
Nevertheless, PTS now requires telecoms building Sweden’s 5G infrastructure to remove Huawei and ZTE components from their central functions by January 1, 2025. Next month, local firms Hi3G Access, Net4Mobility, Telia Sverige, and Teracom will participate in the country’s public spectrum sale.
Unpacking the Implications
Without access to Huawei or ZTE 5G equipment, Sweden’s network providers will likely purchase gear from Nokia or Ericsson.
The two corporations have emerged as leading vendors of fifth-generation network tools in the last few years. Nokia recently won a contract from UK telecom BT to support the country’s new and aging wireless infrastructure. In addition, Ericsson recently acquired a startup called CradlePoint, Inc. to broaden its 5G resources.
For Huawei, PTS’s ruling represents a major roadblock to its plans.
Last month, the conglomerate lost access to certain American derived technologies, including semiconductors essential to its smartphone manufacturing operations. The corporation intended to rebound from the loss by expanding its fifth-generation equipment business. But Sweden has become the latest in an increasingly long list of nations to ban its products from their 5G build-outs.
ZTE’s 2020 roadmap will also have to be reassessed from PTS’s decision.
Earlier this year, the corporation announced it secured 46 contracts to help establish 5G commercial networks across the world. The firm attracted the interest of several local telecoms because of its affordable but high-quality infrastructure equipment. Following PTS’s decision, the company will have to do without the revenue it would have made from Sweden’s service providers.
Ultimately, losing the opportunity to contribute to one 5G network will not prove terminal for Huawei or ZTE. But both firms will feel the financial impact of this and future government infrastructure exclusion mandates.