Nokia, Ericsson Could Be Winners In US, China Trade Wars

The trade war between the U.S. and China is creating new beneficiaries in Europe’s telecom sector. Thus stocks of Nokia and Ericsson are emerging as winners leveraging the U.S campaign against Chinese telecom companies such as Huwaei and ZTE, according to a CNBC host.

Speaking at the “Mad Money”, CNBC’s Jim Cramer, noted that the trade war has given an expanded space for global telecom players and they are feeling relieved.

The U. S campaign against Chinese telecom providers gave a new lease of life to European companies such as Nokia and Ericsson who had been losing out to lower-cost Chinese counterparts in the competition.

This positive gain is coming when many industries and companies are feeling the heat in the two countries. Cramer mentioned that these two telecom stocks are emerging as major winners from a trade war.

“For years, Nokia and Ericsson have been steamrolled by Huawei and ZTE. That's over,” Cramer noted.

The U.S wants Chinese companies out of 5G deals

The U.S. government is making all-out efforts to keep Chinese companies out of 5G wireless space and have taken the campaign to its allies to keep them out globally.

Cramer's comments follow the crackdown by U.S. intelligence agencies against Chinese telecom players Huawei and ZTE, accused of spying on customers in the U.S.

The U.S also framed criminal charges against Huawei's CFO and has sought her extradition.

The exclusion of China players at the behest of U.S will obviously pave for a huge opportunity for entrenched players such as Nokia and Ericsson.

“These once-beleaguered companies now have a chance to win the race for 5G supremacy,” he added.

Cramer reasons that Chinese companies' “ability to win new contracts” will be limited. Obviously, this will help Nokia and Ericsson.

“If you're a telco carrier and warned off of Huawei and ZTE, where are you going to go buy your 5G technology?” Cramer asks.

The favorable situation has already graced Nokia and Ericsson in terms of their rising stock value. After lying dormant for many years, the stocks have surged on the back of prospects in the 5G arena, Cramer noted.

Crammer also credits Nokia with a better portfolio of end-to-end solutions.

Huawei’s plans at World Mobile Congress

Meanwhile, Huawei Technologies is planning to attract new clientele at the World Mobile Congress in Barcelona from Feb. 25-28. But it may face a roadblock from a strong U.S delegation.

According to reports, Huawei is looking to leverage the biggest industry shows to flaunt its products including Huawei Y6 and seal deals with many governments.

However, U.S. officials are on record that they will educate other nations on the security aspect of next-generation mobile equipment. The U.S team may recommend Ericsson, Nokia or Cisco Systems as ideal candidates for 5G mobile gear.

However, Adam Mynott, a spokesman of Huawei said, “we are continuing to grow at MWC.”