Business

Huawei's 5G troubles will test Nordic competitors’ bandwidth

HELSINKI Tougher United Kingdom and European Union rules restricting 5G network supplier Huawei should be a golden opportunity for competitors Nokia and Ericsson, but the companies may struggle to meet the increased demand, analysts warned.

Last week, Britain imposed a 35 per cent cap on the role of "high-risk vendors" in building the country's next-generation communications network over security concerns.

The change will hit Huawei, which critics accuse of being under the control of Beijing, an allegation it strongly denies.

The EU followed by releasing guidelines urging member states to avoid dependency on "high-risk" suppliers, though the bloc stopped short of naming Huawei or calling for an outright ban.

On the face of it, the biggest beneficiaries from this week's announcements appear to be the Chinese firm's two largest competitors, Nokia and Ericsson.

"BT in the UK thinks it is going to cost it £500 million (S$901 million) to switch out Huawei, so a good chunk of that will now be going to Nokia and Ericsson," analyst Matthew Howett of Assembly Research said.

Last Friday, Nokia welcomed the EU's guidelines and commitment to cyber security, saying in a statement that "5G starts and ends with trust and security".

Ericsson greeted the "comprehensive approach" agreed by the EU countries.

But industry watchers claim that fulfilling the increased demand left by market leader Huawei may not be straightforward.

Huawei is widely seen as providing the most advanced 5G for the super-fast data transfers.Any difficulties in meeting demand will be felt by European consumers, said smartphone analyst Neil Mawston of Strategy Analytics. - AFP

BUSINESS & FINANCE