BREAKINGVIEWS-Ericsson debacle exposes costs of anti-Huawei push

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Liam Proud

LONDON, Dec 7 (Reuters Breakingviews) - The Swedish group’s glitchy software crashed some telecom networks. Yet it may grab market share, with its rival’s CFO under arrest and governments backing away from the Chinese company’s kit. A more concentrated market would mean higher prices and a risk of further big outages.

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CONTEXT NEWS
- Ericsson said on Dec. 6 that it had identified faulty software that caused network outages at a number of its telecom customers.

- Japanese operator SoftBank said it had detected a malfunction in Ericsson kit in Tokyo and Osaka. Britain’s O2, owned by Telefonica, also blamed service outages on its supplier Ericsson.

- The Swedish telecoms-kit maker said the main issue was an expired security certificate. Most of the affected customers’ network services were restored on Dec. 6, it said.

- The chief financial officer of Ericsson's Chinese rival Huawei Technologies, Meng Wanzhou, was set to appear in a Vancouver court on Dec. 7 for a bail hearing as she awaits possible extradition to the United States.

- Japan plans to ban government purchases of equipment from Huawei and ZTE Corp to beef up its defences against intelligence leaks and cyberattacks, Reuters reported on Dec. 7 citing sources. Britain’s BT said on Dec. 5 it was removing Huawei equipment from the core of its existing 3G and 4G mobile networks and would not use the Chinese company in the main parts of its next-generation networks.

- New Zealand and Australia have stopped telecom operators using Huawei's equipment in new 5G networks because they are concerned about possible Chinese government involvement in their communications infrastructure.

- At 0900 GMT on Dec. 7, Ericsson shares had gained 5 percent from their Dec. 5 closing price. Finnish peer Nokia was up 4 percent over the same period.

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