STOCKHOLM/LONDON (Reuters) - Sweden's decision to ban China's Huawei from its 5G networks restricts free competition and trade, the head of rival telecoms equipment supplier Ericsson (BS:ERICAs) told the Financial Times.
Swedish telecoms regulator PTS this month halted 5G spectrum auctions after a court suspended parts of its decision that had excluded Huawei [HWT.UL] from 5G networks over national security risks.
"I belong in that category that believes competition makes us longer term a better company. It may be painful shorter term but longer term it drives us to be more innovative and make better products for our customers," Ericsson CEO Borje Ekholm told the newspaper.
Sweden's Ericsson has won contracts from all three major operators in China to supply radio equipment for 5G networks, while Finnish rival Nokia (HE:NOKIA) has not won any 5G radio contracts in the highly competitive market.
Huawei denies being a national security risk and has appealed against Sweden's decision.
China's foreign ministry has said Sweden should lift the ban on Huawei and peer ZTE (HK:0763) to avoid a negative impact on Swedish companies in China.
Ekholm said he expected the overall rollout of the new telecoms networks to be delayed, adding the political focus in Europe should be on rolling out 5G as fast as possible.
"Think about 4G - the debate in Europe was: what is the killer app? The Americans and Chinese rolled out 4G fastest and the app economy for consumers is now dominated by American and Chinese firms," he said.
"5G is going to be the same but for enterprise. Slowing the rollout of 5G is a risk for the economy. Europe risks falling behind again."
Separately, finance chief Carl Mellander told the Morgan Stanley (NYSE:MS) Technology, Media and Telecoms conference that fair competition benefitted the whole industry ecosystem.
He also said Ericsson was growing its market share in Europe, where Huawei is facing increasing restrictions.
"We will continue to take market share where there is an opportunity which is truly value creating," he said.
"For the right cases, perhaps in urban areas for example where we know that the traffic will continue to grow, (or) with leading operators (...) those cases we are happy to step into, even if it sometimes needs a bit of margin dilution in the initial stages."