Foreign equipment makers reap rewards in Chinese market

European telecom equipment makers Ericsson and Nokia are winning key 5G contracts in China, a move that analysts said showcases the country's open attitude to all international players when rolling out the superfast technology.

The news came after China Mobile, the world's largest telecom operator by mobile subscribers, announced it has awarded its first round of 5G network equipment contracts in 2019, which are worth around $2 billion.

China Mobile procured 153 units of MME (mobility management entity) telecom equipment from Sweden company Ericsson, which accounts for 34 percent of the company's procurements. Nokia provided 56 units, accounting for 12 percent.

When it comes to SAE (system architecture evolution) telecom equipment, Ericsson provided 231 units, accounting for 34 percent of China Mobile's business, with Nokia offering 60 units, equivalent to around 9 percent of the overall procurements.

The move came as China Mobile accelerates steps to construct the fifth-generation wireless technology shortly after it won a 5G commercial license. The company aims to offer 5G commercial services in 40 cities by September.

The significant share of Ericsson and Nokia in China Mobile's procurement plans highlights that China delivers its promises of sticking to international cooperation, analysts said.

The Ministry of Industry and Information Technology, the country's top industry regulator, said earlier this month that it welcomes foreign enterprises to actively participate in China's 5G network construction and application promotion.

Markus Borchert, president of Nokia China, said in a reply to China Daily: "The cooperation with multinational companies is highly recognized by the Chinese government, which makes us more confident in the healthy, steady and sustainable development of China's 5G industry."

His comments were echoed by Lyu Tingjie, a professor at Beijing University of Posts and Telecommunications. Lyu said China welcomes competition in 5G roll-out, as it is aware that competition from foreign companies helps lower costs.

"That contrasts the attitude of the US government, which banned Chinese companies from its 5G network deployment," Lyu said, adding that China's sprawling multi-billion-dollar telecom market will bring big opportunities to foreign companies.

China granted four licenses to telecom carriers on June 6, marking that the country has officially kicked off the 5G era. It also marked an accelerated push by China to apply 5G, for its previous plan was to commercialize the technology in 2020.

A string of foreign companies, including Nokia, Ericsson, Qualcomm and Intel, have already participated in three phases of technical tests organized by China to get their 5G products and solutions ready for commercial use in the country.