STOCKHOLM (Reuters), -Sweden’s Ericsson reported Tuesday its fourth-quarter core earnings. These results were higher than market estimates. They are due to higher sales of telecom gear, as more countries implement 5G networks. The increase in these devices offsets a decline of mainland China market share.

According to Refinitiv data, the company’s adjusted quarterly operating earnings rose from 11 billion to 11.9 billion Swedish Crowns ($1.28billion) in a year. This beats the average forecast of 10.30billion.

Topping estimates of 68.33 trillion crowns, total revenue rose by 2% to 71.3 million crowns. The decline in sales from mainland China was due to 1.8 billion crowns. This means that organic growth outside of mainland China was only 5%.

Ericsson’s revenues have been affected by an ailing Nokia (NYSE): a rising Nokia and increased competition in various markets. In addition, Ericsson lost telecom contracts in China after a ban was placed on Huawei by the Swedish Government.

Ericsson has reported that the percentage of its revenue from China is now around 3%. This compares to 10-11% prior to the ban in Sweden on Huawei.

Ericsson’s network unit saw a 3% increase in sales and a 46.4% gross margin, up from 43.5%.

Ericsson purchased two companies, Vonage (cloud communications company) and Cradlepoint (wireless network gear manufacturer), to increase its 5G portfolio.

($1 = 9.2836 Swedish Crowns