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MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Telia Company AB    TELIA   SE0000667925

TELIA COMPANY AB

(TELIA)
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Sweden bans Huawei, ZTE from upcoming 5G networks

10/20/2020 | 11:16am EST
FILE PHOTO: The Huawei logo is seen at the IFA consumer technology fair, in Berlin

STOCKHOLM (Reuters) - Sweden has banned telecoms equipment from Huawei and ZTE in its 5G network, joining other European nations that have restricted the role of Chinese suppliers on security grounds.

Telecoms regulator PTS said https://www.pts.se/en/news/press-releases/2020/four-companies-approved-for-participation-in-the-3.5-ghz-and-2.3-ghz-auctions Tuesday's decision, ahead of a spectrum auction due next month, followed advice from the country's armed forces and security service, which described China as "one of the biggest threats against Sweden".

European governments have been tightening controls on Chinese companies building 5G networks following diplomatic pressure from Washington, which alleges Huawei equipment could be used by Beijing for spying. Huawei has repeatedly denied being a national security risk.

The United Kingdom in July ordered Huawei equipment to be purged completely from its 5G network by 2027, becoming one of the first European countries to do so.

China said no "concrete evidence" had been provided to show equipment from its companies posed a threat to Sweden's national security.

"There are no factual grounds to support allegations of Huawei posing any security threat," a Huawei spokesman said. "The exclusion of Huawei is simply based on groundless presumption and is unfair and unacceptable."

ZTE did not immediately respond to requests for comment.

"The ban leaves network operators with less options and risks slowing the rollout of 5G in markets where competition is reduced," said Ben Wood, chief of research at CCS Insight.

In a potential sign it might retaliate, China's telecoms regulator issued a notice on Tuesday calling for stricter supervision of foreign telecoms companies in the country.

Sweden is home to Ericsson, one of Europe's leading telecoms equipment suppliers and Huawei's biggest rival.

It has won contracts from all three major operators in China to supply radio equipment for 5G networks and could be at risk if the Chinese government decides to retaliate https://www.reuters.com/article/us-china-huawei-europe-idUSKCN24L1NW.

"It could be that some of the European vendors will sell less in China going forward if the Chinese are selling less in Europe going forward," CEO Kjell Johnsen of Swedish-based telecom operator Tele2 said in a post-earnings conference call.

LIKELY BENEFICIARIES

Ericsson and Finland's Nokia are likely to benefit from the ban locally. The Swedish company said it would not comment on national security issues while Nokia declined to comment.

PTS gave companies taking part in the auction until Jan. 1, 2025 to remove Huawei and ZTE equipment from their existing infrastructure and core functions.

It has approved the participation of Sweden's Hi3G Access, Net4Mobility - a consortium of Tele2 and Telenor - Telia Sverige and Teracom in the planned spectrum auction of 3.5 GHz and 2.3 GHz, bands crucial for the 5G rollout.

Tele2, which uses Huawei equipment in its network and had earlier called Huawei an important vendor, said the ban "does not change our plans substantially".

"Many operators have already proven that when they rip and replace Chinese equipment, it doesn't have a negative impact on their capital spending," said industry consultant John Strand.

(Reporting by Supantha Mukherjee, Helena Soderpalm and Johannes Hellstrom in Stockholm; Additional reporting by Brendah Goh in Shanghai; editing by Emelia Sithole-Matarsie and Mark Potter)

By Supantha Mukherjee and Helena Soderpalm


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ERICSSON AB -0.14% 97.3 Delayed Quote.-0.35%
NOKIA OYJ -1.02% 3.3905 Delayed Quote.7.60%
TELE2 AB -0.78% 115.1 Delayed Quote.5.99%
TELENOR ASA -0.62% 144.95 Real-time Quote.-0.65%
TELIA COMPANY AB 0.14% 36.3 Delayed Quote.6.89%
ZTE CORPORATION -4.08% 33.88 End-of-day quote.0.68%
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Financials
Sales 2020 88 587 M 10 688 M 10 688 M
Net income 2020 -7 865 M -949 M -949 M
Net Debt 2020 86 775 M 10 469 M 10 469 M
P/E ratio 2020 -18,4x
Yield 2020 5,42%
Capitalization 148 B 17 907 M 17 911 M
EV / Sales 2020 2,66x
EV / Sales 2021 2,61x
Nbr of Employees 19 776
Free-Float 60,5%
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Mean consensus HOLD
Number of Analysts 24
Average target price 36,85 SEK
Last Close Price 36,30 SEK
Spread / Highest target 32,2%
Spread / Average Target 1,50%
Spread / Lowest Target -20,1%
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Managers and Directors
NameTitle
Allison Kirkby President & Chief Executive Officer
Lars-Johan Jarnheimer Chairman
Rainer Deutschmann Group Chief Operating Officer & Senior VP
Per Christian Mørland Chief Financial Officer & Executive Vice President
Agneta Ahlström Director
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