Sweden’s Ericsson, caught in the middle of a geopolitical battle between Beijing and the West, said on Friday it was no longer banking on previously anticipated contract wins for 5G tenders in China, sending its shares down more than 8%.
The telecoms company has previously warned that its business in China could fall afoul of Sweden’s move to ban Chinese equipment giant Huawei and in the second quarter its sales there fell by 2.5 billion Swedish crowns, the first drop in three years. .
Asked on an analyst call if Ericsson expected to recoup that money, Chief Executive Borje Ekholm replied: “No, it’s not coming back.”
Ericsson currently generates just under 10% of its revenues in China and despite the country preparing for the next round of a massive 5G build-out Chief Financial Officer Carl Mellander told Reuters that it was “prudent to forecast materially lower market share” in the future.
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