In October, Swedish telecom regulator PTS unexpectedly
banned Huawei supplying 5G equipment to Swedish mobile firms due to security
concerns raised by Sweden's security service SAPO, a decision the Chinese
company challenged in the court.
"Sweden's security is of heavy importance and the
administrative court has taken into account that only the Security Police and
the armed forces together have an overall picture regarding the security
situation and the threat to Sweden," the court said in a statement.
Huawei said it was considering its options.
"It's not unexpected based on the fact that the court
is also leading their conclusions on basically the assumptions being made by
SAPO," Kenneth Fredriksen, Huawei's Executive Vice President, Central East
Europe and Nordic Region, told Reuters.
"We will continue to fight for our right to be in the
(Swedish) market."
European governments have been tightening controls on
Chinese companies building 5G networks following diplomatic pressure from
Washington, which alleges Huawei equipment could be used by Beijing for spying.
Huawei has repeatedly denied being a national security risk.
Romania was the latest country that in effect barred China
and Huawei from taking part in the development of its 5G telecommunication
networks in the country.
Huawei's troubles have not only helped companies like Nokia
and Ericsson to grab market share in Europe, Samsung Electronics made its entry
into the continent by signing British telecoms group Vodafone as a customer for
supplying 5G network equipment.
China's embassy in Sweden could not immediately be reached
for a comment. But Beijing had previously reacted angrily to Huawei being
called a security threat.
It had asked Sweden to "immediately correct the
mistake" of banning Huawei and issued a veiled warning this month that it
might take retaliatory action against Ericsson.
An Ericsson spokesman said the PTS decision, now affirmed by
the court, "may adversely impact the economic interests of Sweden and
Swedish industry, including those of Ericsson."
Ericsson, which gets roughly 10 percent of its revenue from
China, has voiced concerns about banning Huawei and flagged risks of losing
market share in China.
A SAPO representative declined to comment and referred
questions to PTS. PTS said it would need to analyse the verdict before giving
any comment.
© Reuters