Europe and the US are co-dependent and large tech companies cannot depend on one continent or the other, the CEO of Nokia Justin Hotard said on Thursday as the European Union considers strengthening support for the region’s industry.
“Every single one of us cannot subsist on one continent or the other. We need both,” Hotard told Reuters in an interview. “Particularly in technology, where the window and the right to win is dictated by that technology cycle, it’s really critical that you have as big a market access as possible.”
Nokia and its Swedish counterpart Ericsson (ERICb.ST), have been highlighting their position as secure Western providers of network gear as governments review their reliance on Chinese suppliers.
However, Europe is also trying to build up its own capacity in the tech industry to reduce its reliance on third countries like the US.
For Nokia and Ericsson, the problem is a delicate one as both companies derive significant revenues from both Europe and the US.
“Every single one in Europe and the U.S. that is of scale is dependent on the European and U.S. market for scale. If you just do the analysis, there is a significant codependence,” Hotard added.
The U.S. currently lacks a major homegrown provider of telecommunications equipment, making the country reliant on Nokia, Ericsson, and South Korea’s Samsung (005930.KS), following the ban on Chinese vendors for national security concerns.
In its proposal to ban so-called “high-risk” vendors in critical sectors, including 5G networks, the European Commission may have further restricted Huawei’s market share in the Old Continent, which could be a positive sign for Nokia and Ericsson, which have experienced several years of underwhelming 5G investment in the region.
Hotard is optimistic about the recent developments in Brussels but believes the EU should speed up its process and make recommendations to operators compulsory.
“Europe needs to support its business champions. That’s not just in tech, but in other areas,” he said.
