Once viewed as a key growth engine, China has become an increasingly difficult market for European telecom equipment makers as geopolitics and shifting investment priorities reshape the landscape.
Ericsson and Nokia reported steep drops in sales from China last year, despite the country’s massive expansion of 5G infrastructure. China had about 4.83 million 5G base stations by the end of November, up by 579,000 since late 2024, according to official data. In just 1 year, China added more 5G sites than Europe has installed since the technology was launched.
This scale once made China a top priority for the Nordic vendors. In 2019, Ericsson generated nearly $1.8 billion in China revenue and held about 10% market share. Sales peaked at close to $2.1 billion in 2020 after major 5G contracts were awarded. By 2025, China revenues had fallen to less than 40% of that level. Ericsson’s latest earnings suggest China accounted for around 3% of total sales in 2025, or roughly $665 million to $905 million, down from $1.15 billion in 2024.
Ericsson said the recent decline reflects lower customer spending as Chinese operators shift focus toward AI investments. A spokesperson said demand for its products remains stable despite reduced investment levels.
The biggest drop came in 2021, when Ericsson’s China sales fell to about $1.1 billion. This coincided with rising geopolitical tensions following Western restrictions on Chinese vendors Huawei and ZTE. Sweden barred both firms from its 5G networks in October 2020, citing security concerns.
Nokia has faced similar pressure. In late 2025, the company said Western suppliers together held only about 3% of China’s telecom market. Nokia’s China-related revenues, reported under “Greater China,” fell from nearly €2.2 billion in 2019 to about €1.1 billion in 2024. In 2025, they declined a further 19% to €913 million.
Former Nokia mobile networks chief Tommi Uitto said, “Western suppliers, which is only us and Ericsson, have 3% market share now in China and it’s been coming down, and we are going to be excluded from China for national security reasons.”
Both companies have cut staff in China in recent years. Ericsson’s Northeast Asia workforce fell from about 14,000 in 2021 to around 9,500 by end-2024. Nokia’s Greater China headcount dropped from 15,700 in 2019 to 8,700 in 2024.
With China leading investment in next-generation networks, reduced access could leave Ericsson and Nokia sidelined as the industry moves toward 6G.
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