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China Gloats Over Nokia’s 5G Contract Losses, as Company Cites “Unique Market Dynamics”

Nokia has "come away almost empty-handed in terms of huge 5G contracts awarded by China's big three telecom carriers"

By claudia glover

A state-run Chinese web portal this week pushed out a press release noting that Finland’s Nokia has “come away almost empty-handed in terms of huge 5G contracts awarded by China’s big three telecom carriers.”

The unusual release from China.org.cn, pushed out over Cision’s PR Newswire, appears to gloat over Nokia being “noticeably absent” from the list of vendors selected to supply China Mobile, China Telecom and China Unicom with 5G infrastructure in a series of contracts worth some $10 billion.

The release comes as China’s Huawei runs into sustained opposition in the west over security and code quality concerns.

Read this: Damning Huawei Security Report: The Top 10 Key Takeaways

Nokia, which reported Q1 2020 earnings on April 30, has stripped China from its outlook in a tacit admission of headwinds in the market, saying obliquely that “pursuing market share in China presents significant profitability challenges and the region has some unique market dynamics.”

(China Unicom, Telecom and Mobile are expected to lay around half a million 5G base stations in and around China this year, the Chinese web portal notes in its release, which emphasises that rival Ericsson has seen some local success).

Nokia Have Not Ruled Out a Return to 5G Radio in China

A spokesperson for Nokia told Computer Business Review that it had not outright walked away from the Chinese market and retained hopes of winning fresh deals in China, including with state-owned China Unicom.

The company told us in an emailed comment: “As of today, with our recent win with Taiwan Star, we have 70 5G deal wins and 21 live networks deployed. And we are quite optimistic that we will win a share of 5G core with China Unicom although we have not yet received official notification.

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The company added: “As we have said in our Q1 results, we would take a prudent approach to pursuing market share given the profitability and cash challenges there. Given that, we have prioritized our 5G radio activities on features that are required globally and for markets with better economics, and have avoided specific local requirements.

“We will remain a meaningful player in China and we have a large 4G installed base, ongoing attached and independent services, and continued opportunities in the broader 5G buildout with China’s major operators in areas such as fixed, IP Routing, and optical… A return to 5G radio at some point in the future is also not out of the question, but keep in mind that our approach has consistently been prudent”.

 

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