The rollout of 5G services across Europe has being slowed by U.S. sanctions against Huawei and as European governments review the impact of using Chinese equipment, the head of Swedish telecoms group Tele2 said.
The U.S. has targeted Huawei on security grounds, banning U.S. companies from selling components or software to the Chinese telecom giant, but U.S. President Donald Trump has said to lift such restrictions on Huawei during the G20 summit over the weekend.
Tele2 CEO Anders Nilsson said the biggest impact of the restrictions and security concerns was being felt through a delay in 5G investment across Europe.
Tele2, Sweden's second-largest telecoms company which also operates in the Baltic countries, has been holding off on striking deals with equipment suppliers.
"We have a global supply chain, so whoever you buy equipment from you will find components from China. Even if we buy equipment from Ericsson, which is our neighbor here, you will find Chinese hardware and parts in that equipment," he told Reuters at Tele2's Stockholm headquarters.
"We're right now talking to all the vendors, but decisions are postponed. This is not only Huawei, this is all vendors."
He also said he had no plans to stop selling Huawei handsets as U.S. sanctions had not led to any significant drop in sales or impact in demand.
Tele2 chief executive Anders Nilsson at the brand's pocket-sized shop at its headquarters in Stockholm, Sweden, June 28, 2019. /Reuters Photo
4G or 5G
5G rollout has been billed as transformative for the telecommunications industry, resulting in a 10-fold increase in data transfer capacity that would help enable self-driving car fleets and smart factories.
Nilsson said that consumers were likely to face higher prices if governments banned Huawei, limiting competition to Nordic suppliers Ericsson and Nokia.
"From our perspective, the main reason to do 5G right now is because it is a good way to build capacity, but we can continue building capacity in 4G. So 5G is not something we need to do right now," he said in an interview before Sino-U.S. tensions eased over the weekend.
"But... ultimately if we go down the more protectionist route here, consumers will have to pay price."
In follow-up comments on Monday, Nilsson said his view was unaltered.
"We follow the events with great interest, but it's too early to take any firm decisions based on it," he said.