In the run-up to 5G’s launch, Europe’s big telcos looked at the vendor landscape through gaps in their fingers, like kids watching a scary flick. Ericsson was still in recovery mode after the self-harm inflicted by R&D cuts and subsequent 4G losses. “We’re not proud of that,” said Erik Ekudden, today’s chief technology officer (CTO), in June.
Nokia, the other local option, was in even worse shape following its €15.6 billion (US$18.1 billion) takeover of Alcatel-Lucent. Its radio access network (RAN) specialists had leant heavily on Intel for 5G network chips, and Intel had “failed them famously,” said Marcus Weldon, a former CTO.
The 5G products being developed by Samsung, an Asian alternative, impressed some telcos. But Samsung had not figured prominently in 4G and did not at the time support 2G, a venerable standard expected to survive into the early 2030s. That left Huawei and ZTE, the Chinese vendors. The former had seemingly emerged as a supplier that combined low prices with advanced products and the attentiveness to good service of a top Edwardian butler. There was only one problem – various politicians wanted to ban it.
The campaign launched by the US under the first administration of Donald Trump appeared to quickly spread. By early 2020, the European Union (EU) had published a mealy mouthed “5G toolbox” advising member states to avoid “high-risk vendors” in 5G. The euphemistic language was understood to mean Huawei and ZTE years before Thierry Breton, a former EU commissioner, publicly called them out.
Stillborn
The answer to this apparent vendor calamity was something known as open RAN. In its initial guise, it was a clear attempt to inject competition into the RAN market by opening the interfaces between different components. Proprietary interfaces had forced operators to buy everything from the same vendor system, whether they wanted to or not. Standardized substitutes would theoretically allow specialists that lacked a full RAN portfolio to be joined together like Lego bricks by telcos.
That multivendor iteration of open RAN has long since perished. A tacit recognition of that is included in a report from Assembly Research, commissioned by Connect Europe, a lobby group representing Europe’s telcos. “In the EU, the open RAN market remains at a nascent stage, with most operators relying primarily on an end-to-end solution from a single vendor,” said the report, dated July but published only this week. It offers further evidence that Deutsche Telekom, Telefónica and others are determined to retain Huawei in the absence of alternatives.
While the new report charitably uses the word “nascent” to describe open RAN’s status, stillborn would be a more accurate description. The O-RAN Alliance, the group developing open RAN standards, is now more than eight years old – an eon in the tech and telecom industry. Yet no viable competitors to the big five RAN vendors have emerged in this period. Data from Omdia, a Light Reading sister company, shows Huawei, Ericsson, Nokia, ZTE and Samsung collectively served about 95% of the global market in the first half of 2026.
Whatever the objectives, the open RAN movement ignored commercial realities and market forces. Most telcos seem to prefer the convenience of a pre-integrated product set to the freedom of combining. “You don’t buy a burger from McDonald’s, a coke from Burger King and fries from Five Guys,” said John Strand, the CEO of Danish analyst firm Strand Consult. In more advanced 5G technologies, pairing vendors remains a technical challenge. Smaller developers without deep pockets have naturally struggled to compete in R&D.
Above all, operators have been investing less in 5G rollout. Spending on RAN products fell from $45 billion in 2022 to $35 billion last year and is expected to remain at that level in the foreseeable future, according to Omdia. After addressing their early 5G-related problems, both Ericsson and Nokia have been hurt by the telco reluctance to spend more. Each vendor has cut thousands of jobs in the last few years to safeguard profits.
But their parlous condition has not stopped the operators from lobbying on Huawei’s behalf. Unrelenting enthusiasm for the Chinese vendor is further proof that most telcos were never serious about the initial open RAN model, which Huawei does not support and continues to oppose. It is evident in two reports that have appeared in recent weeks.
Published in July, the first, from the GSM Association, argued that replacing Huawei would be too expensive for telcos to manage and was analyzed here. It followed efforts by the European Commission at the start of the year to mandate Huawei’s removal from 5G networks by a firm deadline and punish non-compliance.
Yet it glossed over the EU’s rationale – that Huawei’s products could be used by the Chinese government for spying or sabotage. While the company has long denied that accusation, the idea of China passing information to Russia that facilitates an attack on an EU country no longer sounds far-fetched to security watchdogs. A GSMA estimate that replacing Huawei would cost as much as €35 billion ($40.7 billion) always looked on the high side. But would even that amount be too much to spend if it neutralized the risks?
The second report from Connect Europe instead focuses on the operational challenges of removing Huawei. Legislation would be excessive and disproportionate, it argues. A swap-out would be disruptive, setting countries back on the road to ubiquitous 5G coverage, say the report’s authors. The so-called “rip and-replace” process would gobble capital expenditure and eventually leave Europe with fewer vendors from which to choose, the writers reckon.
Careful what you wish for
Many of these points echo the conclusions of the GSMA report. But even if they are right, the unaddressed question – ignoring any security issues – is whether telcos would ultimately be worse off with Huawei than without it.
Critics including Nokia CEO Justin Hotard say the Nordic vendors are being squeezed out of China. By late 2025, their combined market share was just 3%, according to Nokia’s estimate. Ericsson alone claimed a 10% share of the Chinese market back in 2019. The other 97% is controlled by Chinese vendors, and chiefly Huawei. In such a vast market, that protectionism is as good as a massive subsidy.
It has, undoubtedly, allowed Huawei to be more “aggressive” – a word used by departing Ericsson boss Börje Ekholm two years ago to describe Chinese vendors – when competing in a more open Europe, where Huawei and ZTE still hold a 32% market share, according to Assembly.
Competition on this basis hardly sounds fair, and it has likely contributed to the Nordic vendors’ problems. Excluding Infinera, the optical business it acquired last year, Nokia cut almost 29,000 employees from its headcount between 2018 and the end of 2025, about 28% of the earlier total. More jobs are set to go this year, including at least 1,600 in China, from which Nokia is now in retreat.
For the second quarter, Nokia’s mobile infrastructure business earned nearly €100 million ($116 million) less in operating income than it made from licensing revenues at its highly profitable Technologies unit, which reported an operating margin of more than 70% last year. Ericsson, meanwhile, has slashed almost 19,000 jobs since 2022, around 18% of that year’s total. For the recent first half, its operating profit slumped 40% year-over-year, to 7.4 billion Swedish kronor ($770 million), as sales fell 8%, to SEK102 billion ($10.6 billion).
The disappearance of names including Alcatel, Lucent, Marconi, Motorola, Nortel, Siemens and Panasonic from the RAN market this century shows there is no survival guarantee for suppliers. But further exits now would conceivably put Europe’s telcos largely at the mercy of the Chinese. If they care so much about diversity, operators might want to reconsider their tactics.
