US Campaign Against Huawei’s 5G Benefiting Nokia

Revenue for Nokia is increasing because of increasing demand for construction of 5G networks. And the sanctions against the market leader and Chinese tech giant Huawei is also reportedly benefitting Nokia

In the second quarter, there was a 7 per cent increase in the sale revenue of Nokia at €5.7 billion euros or $6.3 billion, said the Finnish telecom equipment maker on Thursday which beat analysts’ expectations of sale revenues of €5.4 billion or $6.1 billion.

Currently, Nokia has 45 commercial deals in place for 5G, and nine of the networks are already alive, the company said. And the company expects that this momentum to continue, partly because of the US campaign against Huawei.

“Some customers are reassessing their vendors in light of security concerns,” Nokia said in its earnings statement. There was a 6.8 per cent rise in the shares of Nokia following the announcement of the company performance.

It has been about a year that the United States administration of Donald Trump has been running a campaign against Huawei over concerns of national security form use of its telecom equipment. While the US Commerce Department has already blacklisted Huawei in May of year, the Trump administration is also trying to convince its allies about not allowing the Chinese firm to participate in construction of 5G networks in their countries.

All allegations against Huawei have been repeatedly denied by it.

Apart from Nokia and Huawei, the other major global player in the networking gear industry is Ericsson. The three networking companies are competing to win contracts as countries and mobile phone service providers race to build out 5G networks. 50 commercial 5G contracts globally had been won by Huawie as of June this year.

The political environment has helped Nokia to better its chances to grab market share, Tommi Uitto, president of mobile networks at Nokia, had told the media last month.

“There are some countries that have banned Chinese competitors, and of course that creates an opportunity for us,” Uitto said.

Changes in the regulatory landscape have forced most of the wireless companies that buy telecommunications equipment to adjust to the changes. For example, a decision on whether to ban Huawie from participating in the country’s mobile phone networks has been deferred bny the United Kingdom, the UK government said on Monday.

Nokia has signed some of its largest deals to date in the United States where Huawei was being avoided by nationwide wireless companies even before the Trump administration ban.

Nokia said that the $3.5 billion deal it signed with T-Mobile USA last summer was its highest revenue 5G contract globally. A 5G network for T-Mobile is being built by Nokia. The Finnish company has also worked with Verizon on 5G tests.

(Adapted from CNN.com)

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