Swedish telecom giant Ericsson’s network division is forced to slash costs by 50 percent to keep up with competition from China.

Ericsson, the world’s leading mobile phone network provider, wrote in a company strategy document that its Network division has to cut purchasing costs by 50 percent in the next five years due to increased competition from Chinese Huawei and ZTE.

“For purchasing, this means halving costs over five years,” Swedish magazine Ny Teknik quoted Ericsson as saying in the document.

Ericsson’s Networks division, offering products and solutions such as radio base stations and mobile switching centers, makes up about two-thirds of the company’s sales.