In the second half, Nokia’s 5G revenues are expected to grow sharply as the company has signed 36 commercial wins to date of which 30 commercial deals have happened during Q1 2019.
Presenting Nokia Interim Report for Q1, 2019, Rajeev Suri, President and CEO, Nokia said, “As the year progresses, we expect meaningful topline and margin improvements. 5G revenues are expected to grow sharply, particularly in the second half of the year, driven by our 36 commercial wins to date. Global services profitability should improve as we recover in a handful of large rollout projects, IP routing is now firmly back to growth given our product leadership and optical networks continues its long run of growth. We are also seeing good underlying momentum in our strategic focus areas of software and enterprise, and we are moving steadily forward on our path to build a strong licensing business that is sustainable for the long-term.”
In addition, competitive intensity has slightly increased in certain accounts as some competitors seek to be more commercially aggressive in the early stages of 5G and as some customers reassess their vendors in light of security concerns, creating near-term pressure but longer-term opportunity added Suri.
During the period, Nokia has signed significant deals with major providers across the globe. Nokia has reached a MoU with Telecom Egypt to introduce a 5G network and test cases in the Egyptian market; the launch of South Africa’s first commercial-ready 5G network in Cape Town with South African Operator rain; a deal with Saudi Telecom Company to deploy Nokia’s end-to-end 5G solutions in western and southern Saudi Arabia; and a five-year deal with U.S. Cellular to provide end-to-end 5G technology, software and services solutions.
In Europe, A1 in Austria announced they selected Nokia to expand next-generation 5G mobile communications in that country. Switzerland’s Salt selected Nokia’s radio and mobile core network in order to prepare for the roll-out of 5G and Ice Group will deploy Nokia’s AirScale Radio Access technology in urban areas across Norway to build a 5G-ready mobile network. After the quarter ended, Nokia announced the first 5G call on a commercial network in Latin America with ANTEL Uruguay.
In other markets, Nokia, in partnership with Sprint, is field testing standards-based 5G in Los Angeles. Telenor Pakistan announced it is deploying the country’s first 5G-ready cloud-based RAN platform and controllers. After the quarter ended, Proximus announced it will deliver a tenfold capacity increase to its IP transport network with the 7750 SR-s, and BT also announced it had selected the platform to dramatically boost its backbone network capacity to meet growing traffic demand from FTTP and 5G.
In fixed access, Nokia introduced a new FastMile 5G Gateway that allows operators upgrading their LTE network to capture new Fixed Wireless Access (FWA) revenue and accelerate 5G rollouts. In Australia, Nokia partnered with Optus to provide the 5G RAN and Fastmile 5G CPEs for their home broadband. Telia will introduce Nokia FastMile 5G gateway for 4G-5G FWA to the Finnish market. The FWA 5G gateway is also part of the rain launch of its 5G network in Cape Town.
Nokia has collaborated with Vodafone on active antennas to boost 5G radio capacity and reduce costs, and a partnership and demonstration with CMCC for 5G AI powered QoE solution for an immersive VR gaming application. Nokia announced adoption of the fronthaul specifications of the Open Radio Access Network Alliance (O-RAN) and is now part of the AT&T Innovation Program.
The company has also partnered with Qualcomm and Deutsche Messe to showcase 10 industrial applications/use cases in the 5G Arena at the world’s largest industrial trade show Hannover Messe 2019.
Not only this, Nokia has also introduced a 5G Maturity Index to guide operators on how to align technology investments with business objectives to succeed with 5G-enabled services. The company has launched Cognitive Collaboration Hubs to help operators design 5G networks and create AI-enabled use cases.