AT.T CEO pours cold water: U.S. investment in Ericsson and Nokia is not a good idea

U.S. officials said the U.S. should buy a controlling stake in a European telecommunications equipment supplier to avoid a lockdown,media reported, while Randall Stephenson, chairman and CEO of AT?amp;T, poured cold water on the proposal.

“I don’t think it’s a good idea for the government to own and develop private solutions in private companies,” Randall Stephenson told CNBC. He added that the U.S. should “innovate the way we get out of this competitive quagmire” by exploring open, software-based solutions to “ensure that we are not bound by a single vendor.”

AT.T CEO pours cold water: U.S. investment in Ericsson and Nokia is not a good idea

Picture: Randall Stephenson.

“We need to win with innovation and software, not just by government orders,” he said. “

Earlier, U.S. Attorney General William Barr recommended that the U.S. buy a controlling stake in Ericsson or Nokia to strengthen its influence in the network infrastructure market and reduce reliance on Chinese-made equipment.

Cevian Capital, a radical shareholder with an 8.4 percent stake in Ericsson, was open to the idea in a public statement, saying it was “clearly good for Sweden, for Ericsson and shareholders,” Reuters reported.

The U.S. goal is to develop a global alternative to Huawei to avoid what it calls a security threat from Huawei, but U.S. government officials disagree on how to achieve that goal.

Larry Kudlow, a White House economic adviser, recently suggested using open RAN as a viable option, noting that the U.S. government is pushing FORT and other companies in this area. But William Barr later scoffed at the idea, arguing that it was a “completely untested” approach that “takes years to get started, and even if it works, it takes a decade to usher in a golden age”.

On plans to invest in Ericsson and Nokia, William Barr said: “Injecting one or both of us with our huge market and financial strength will make them an exceptionally strong competitor and allay concerns about its durability.” “