(Adds no comment from PTS)
By Supantha Mukherjee and Johan Ahlander
STOCKHOLM, June 22 (Reuters) - A Swedish court on Tuesday
upheld a ban against Huawei selling 5G equipment in the
country, dashing the Chinese company's hopes of staging a
comeback in Europe and increasing the chances of potential
retaliation by China against rival Ericsson.
In October, Swedish telecom regulator PTS unexpectedly
banned Huawei supplying 5G equipment to Swedish mobile firms due
to security concerns raised by Sweden's security service SAPO, a
decision the Chinese company challenged in the court.
"Sweden's security is of heavy importance and the
administrative court has taken into account that only the
Security Police and the armed forces together have an overall
picture regarding the security situation and the threat to
Sweden," the court said in a statement.
Huawei said it was considering its options.
"It's not unexpected based on the fact that the court is
also leading their conclusions on basically the assumptions
being made by SAPO," Kenneth Fredriksen, Huawei's Executive Vice
President, Central East Europe and Nordic Region, told Reuters.
"We will continue to fight for our right to be in the
(Swedish) market."
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.
Romania was the latest country that in effect barred China
and Huawei from taking part in the development of its 5G
telecommunication networks in the country.
Huawei's troubles have not only helped companies like Nokia
and Ericsson to grab market share in Europe, Samsung Electronics
made its entry into the continent by signing British
telecoms group Vodafone as a customer for supplying 5G
network equipment.
China's embassy in Sweden could not immediately be reached
for a comment. But Beijing had previously reacted angrily to
Huawei being called a security threat.
It had asked Sweden to "immediately correct the mistake" of
banning Huawei and issued a veiled warning this month that it
might take retaliatory action against Ericsson.
An Ericsson spokesman said the PTS decision, now affirmed by
the court, "may adversely impact the economic interests of
Sweden and Swedish industry, including those of Ericsson."
Ericsson, which gets roughly 10% of its revenue from China,
has voiced concerns about banning Huawei and flagged risks of
losing market share in China.
A SAPO representative declined to comment and referred
questions to PTS. PTS said it would need to analyze the verdict
before giving any comment.
(Reporting by Johan Ahlander and Supantha Mukherjee in
Stockholm; Editing by Simon Johnson, William Maclean, Catherine
Evans)
Vodafone (VOD)
