Sweden bans Huawei from involvement in 5G network in October 2020

Context

On October 20, 2020, the Swedish Post and Telecom Authority (PTS) banned use of Chinese firms’ products in key parts of the country’s 5G infrastructure development, citing national security considerations. In a statement ahead of the country’s November 2020 auctions for two 5G frequency bands, the PTS stated that “[n]ew installations and new implementation of central functions for the radio use in the frequency bands must not be carried out with products from the suppliers Huawei or ZTE” – notably naming the impacted Chinese firms directly. The PTS justified this decision citing “(security) assessments made by the Swedish Armed Forces and the Swedish Security Service”. Additionally, Swedish authorities reportedly required existing Huawei and ZTE products to be phased out of Swedish telecoms networks by January 2025.

The context for this measure included great power competition between the US and China, and growing support among European states for similar measures.

Responses

(i) Chinese Government and Industry Responses

In October 2020, Huawei denied that its products posed a security threat to Sweden, telling press that “Huawei has never caused even the slightest shred of threat to Swedish cyber security and never will… Excluding Huawei will not make Swedish 5G networks any more secure. Rather, competition and innovation will be severely hindered.” In January 2021, Huawei lodged a legal appeal against the decision in Swedish court. In April 2021, Sweden’s administrative court began hearing the case, but in June 2021 the court upheld the policy, rejecting Huawei’s request. Following the introduction of this case, a spokesperson for China’s commerce ministry, Gao Feng, told press that “China urges Sweden to immediately correct the mistake, and meet China half-way and find solutions on the basis of preserving China-Sweden economic and trade cooperation”. At the same time, Gao accused Sweden of violating WTO rules, and said that Beijing would “take all necessary measures” – interpreted by some reporting as a threat of retaliation.

(ii) Swedish Government and Industry Responses

Notably, Swedish firm Ericsson, a rival of Huawei in the 5G infrastructure space, opposed the measure, with CEO Borje Ekholm saying “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.” Chinese state media speculated that this opposition was due to fears of retaliation, with the Global Times quoting  Zhang Xiaorong, director of the Beijing-based Cutting-Edge Technology Research Institute, as saying that “Ericsson is reluctant to face retaliation for Sweden’s unwarranted offense against Chinese firms. Sweden’s market is too small. Demographically speaking, it’s only half the size of Beijing. But the Chinese market is so big that Ericsson’s presence in the Chinese market means it has a future in the 5G era, so it’s not hard to choose between China and Sweden.”

Status

At time of writing (November 2024) this measure remains in place.

Key Takeaways

This case is notable given the use of Sweden’s more direct and forceful language in its announcement of the measure – described by one outlet that “Sweden minced no words”. It remains an open question as to why China has not chosen (yet) to target Ericsson in retaliation. This may be in relation to Ericsson’s opposition to the measure.

References and Further Information

Cerulis, L. 2020. “Sweden bans Huawei, ZTE equipment from key parts of 5G network.” Politico. October 20. Available at: https://www.politico.eu/article/sweden-bans-huawei-zte-from-key-5g-parts/

Chan, K. 2020. “Sweden bans Huawei, ZTE from 5G, calls China biggest threat.” AP News. October 21. Available at: https://apnews.com/article/sweden-china-europe-telecommunications-security-services-586826c6aa02d1571c8b4d6840043931

Global Times. 2021. “Ericsson threatens to leave Sweden, unwilling to lose Chinese market over Huawei ban: analyst.” January 4. Available at: https://www.globaltimes.cn/ page/202101/1211790.shtml

Lau, S. 2021. “Sweden faces Chinese blowback over Huawei ban.” Politico. January 21. Available at: https://www.politico.eu/article/sweden-faces-chinese-blowback-over-huawei-ban/

Mukherjee, S. 2022. “Swedish court upholds ban on Huawei sale of 5G gear.” Reuters. June 22. Available at: https://www.reuters.com/business/media-telecom/swedish-court-upholds-ban-huawei-sale-5g-gear-2022-06-22/ – :~:text=In 2020, Swedish telecom regulator,company challenged in the court.

Reuters. 2020a. “Sweden bans Huawei, ZTE from upcoming 5G networks on security grounds.” Mint. October 20. Available at: https://www.livemint.com/news/world/ sweden-bans-huawei-zte-from-upcoming-5g-networks-on-security-grounds-11603193275224.html

Reuters. 2020b. “Ericsson takes issue with Swedish ban on Huawei – FT.” November 19. Available at: https://www.reuters.com/article/technology/ericsson-takes-issue-with-swedish-ban-on-huawei-ft-idUSKBN27Y10Y/

Tiezzi, S. 2020. “Sweden Becomes Latest – and Among Most Forceful – to Ban Huawei From 5G.” The Diplomat. October 21. Available at: https://thediplomat.com/2020/10/ sweden-becomes-latest-and-among-most-forceful-to-ban-huawei-from-5g/