Huawei issues don’t mean ‘free ride’ for Ericsson, CEO says

Ericsson CEO Börje Ekholm on Tuesday pushed back against the idea that U.S. pressure on Huawei gives the Swedish telecom equipment vendor a “free ride,” telling CNBC he doesn’t think so.

Instead, it’s “creating uncertainty in the market, reducing investments overall,” Ekholm said during an interview with CNBC at the World Economic Forum in Davos, Switzerland, adding that Ericsson so far is seeing “very little effect” on its order books as a result of Huawei discussions.  

He also refuted the suggestion that Ericsson is behind Huawei on 5G technology, pointing to the presence of Ericsson gear in the first commercial 5G networks, launched in the U.S., as well as the first in Europe, with customer Swisscom in Switzerland.  

Ekholm went as far as to say “Swisscom has the best network of all operators globally,” noting that it uses only Ericsson equipment.

From that standpoint, Ekholm said he found it “a bit difficult to say that we’re behind when I see no one ahead of us,” in terms of 5G technology.

The U.S. has already made moves to keep Huawei out of the country’s communications networks, and has been pushing for allies around the world to bar Huawei equipment from 5G deployments, claiming security concerns stemming from the vendor’s close ties to the Chinese government. Huawei has continuously denied allegations that it could be forced to spy for China or that its gear poses more of a risk than equipment from other vendors.

RELATED: Huawei fights FCC USF restrictions with new lawsuit

U.S. pressure has ramped up as the U.K. is expected to decide soon on whether to completely ban Huawei or continue to let the company continue to participate in portions of its telecom networks. Major operators in the U.K. already use Huawei for 4G, and some estimates claim a total shut-out of the vendor could delay 5G rollouts by two years or more. German authorities are also still weighing a decision on Huawei.

Speaking in Davos to CNBC, Ekholm wouldn’t cede 5G superiority to Huawei, but said the geopolitical uncertainty isn’t a positive, and that “I hope we find a solution that allows the world to move forward.”

Security will be critical in 5G networks that stand to connect everything, he noted. 

“Of course that’s going to put extra security demands on the networks,” Ekholm said. “Cybersecurity is a bigger threat, so we need to think differently about security.”

RELATED: Editor’s Corner: Does the U.S. need its own Nokia, Ericsson, Huawei?

Addressing U.S. President Trump at a dinner attended by global CEOs, including Ericsson and Nokia, Ekholm said the United States is Ericsson’s biggest market and stressed the need to free up mid-band spectrum and streamline the permitting process for the country to lead in 5G development.

“Freeing up the C-band really quickly, it’s going to be critical,” Ekholm said, according to a White House transcript. He noted the site permitting process still takes two years in the U.S. and called it “a real restriction.”

Lack of power supply to support next-generation networks is also an issue, he added.

“We need to really invest in building the capabilities to actually roll out the network,” Ekholm said. “When that happens, we will have – the United States will have a strong platform for innovation in 5G.”

Trump told Ekholm, “Ericsson has done a great job with 5G,” adding the U.S. is “in very good shape.”

“I think we’re far advanced, much further than people understand,” Trump said.