Ericsson has warned that it may end up with a lower share of China’s telecoms market following the rollout of 5G due to an ongoing spat over controversial tech firm Huawei.
The telecoms company has been thrown into the middle of a row between China and Sweden after its home country’s government last year banned Huawei from its 5G networks due to security concerns.
Huawei has sued to overturn the decision and a ruling is expected in the coming weeks.
China has also threatened retaliation against Ericsson, with authorities warning the company’s involvement in 5G networks would depend on Stockholm changing its stance towards Huawei.
Ericsson today said it had been invited to various tender processes in China, but that the final outcome remains uncertain.
“It is the company’s current assessment that the risk has increased that Ericsson will in those tenders be allocated a significantly lower market share than its current market share,” it said in a statement.
The warning came in an update to investors related to Ericsson’s issue of a €500m (£430m) unsecured eight-year bond.
Shares in the telecoms company were down more than one per cent in early trading.
The rising threat of retaliation has prompted Ericsson boss Borje Ekholm to hit out at Sweden’s decision to ban Huawei and come out in support of his company’s arch rival.
Aside from telecoms firms, Beijing has also threatened to retaliate against other Swedish businesses operating in China.
Retail giant H&M has also been locked in a row with the country amid concerns about the use of forced labour in cotton production in Xinjiang.