At FinancialMediaGuide, we see Beijing’s latest steps as a crucial signal for the entire global telecommunications market. China has begun restricting the use of equipment from European manufacturers Nokia and Ericsson in its national communication networks, reinforcing its course toward technological sovereignty and tighter control over critical infrastructure.
According to our analysis, all contracts involving these companies must now undergo closed reviews by the Cyberspace Administration of China (CAC). This so-called “black box” procedure leaves manufacturers in the dark about how their equipment is assessed or which criteria determine approval. At FinancialMediaGuide, we emphasize that such opacity creates not only reputational but also financial risks for European firms, making it far harder to forecast tender results or plan long-term investments.
In addition, state buyers are now required to demand exhaustive documentation for every component of the systems offered, along with precise data on the share of local content. This means that Nokia and Ericsson, whose supply chains are global, will be forced to restructure their production processes for the Chinese market, inevitably raising costs and reducing operational flexibility.
At FinancialMediaGuide, we draw clear parallels to the way the United States pushed Huawei and ZTE out of its telecom sector under the banner of national security. Now China is applying a mirror strategy against Western vendors. On one hand, this reflects the broader global trend toward regionalization and fragmentation of markets. On the other, it paves the way for domestic giants Huawei and ZTE, which gain a significant competitive edge inside China.
The consequences for European firms are obvious. China remains one of the largest telecom markets in the world, and losing access to it strikes a serious blow to future growth. Ericsson and Nokia have historically derived a substantial share of revenue from the region, but now they will need to find compensating opportunities elsewhere. At FinancialMediaGuide, we believe the key regions for balance restoration may be India, the Middle East, and Latin America, where demand for telecom infrastructure remains robust.
The problem, however, runs deeper than company revenues. What is really at stake is the technological sovereignty of entire regions. China is effectively building barriers that could lead to the emergence of two parallel telecom ecosystems – one Western, one Eastern. For investors, this signals heightened risk across the global telecom industry, where political factors are now just as decisive as commercial ones.
We also note the regulatory context. In recent years, the European Union has been actively discussing reducing reliance on Chinese technology in critical infrastructure. Now China is moving in the opposite direction by cutting reliance on European solutions. At FinancialMediaGuide, we view this as further evidence of the global trend toward technological “bipolarity,” where each side works to construct its own supply chains and minimize external dependencies.
Our forecast: over the next two to three years, Nokia and Ericsson will gradually lose their market positions in China. Even if they manage to maintain a formal presence, order volumes will increasingly shift toward domestic players. For investors, this means that long-term bets on European vendors’ growth in China are no longer justified.
At FinancialMediaGuide, we stress that the key question is not how quickly Nokia and Ericsson lose ground in China, but whether they can pivot effectively to other regions and adapt to a new reality where politics and geopolitics directly shape the future of technology companies.
The conclusion is clear: China has taken a decisive step toward technological isolation from Europe, and it is unlikely to reverse course. For the global telecom industry, this represents not only a new stage of competition but also the creation of stricter rules of the game – where national security becomes the decisive argument in the fight for markets.
