Nokia appears to be profiting from Huawei 5G bans
Nokia posted earnings on Thursday and the figures indicate bans of Huawei’s 5G equipment has increased demand for alternatives.
Over the fourth quarter, Nokia’s profits reached £652 million ($852 million) from £629 million ($822 million) a year earlier. Sales grew three percent to £6 billion ($7.8 billion).
While the growth is not huge, it’s above analyst predictions. This indicates the bans and uncertainty surrounding Huawei 5G equipment is giving Nokia a boost.
Nokia CEO Rajeev Suri expects the company’s performance to improve further this year as “a fast and meaningful shift” into 5G networks takes place.
The rollouts of a next-generation network are often a profitable time for equipment vendors, even more so when a major competitor is being eliminated by national policies.
Some countries like the US and Australia have banned Huawei’s 5G equipment over national security fears. Others, like many in Europe, are still determining whether to implement bans.
‘Opting For Rivals’
Even where bans are not yet in place, some operators are opting for rivals amid the uncertainty to avoid delaying their 5G rollouts and/or the cost associated with switching from banned equipment.
Just this week, Vodafone announced it will stop purchasing 5G core equipment from Huawei across its European operations amid potential bans.
Meanwhile, in Australia, Optus was forced to adjust its suppliers following the government’s ban. The operator conceded this week it’s led to building its 5G network without the best available equipment.
"From a pure technology perspective, Huawei is probably ahead of the other three," said Optus CEO Allen Lew to The Sydney Morning Herald. "But what we've got from the other suppliers will enable us to provide a globally competitive service."
Optus launched a limited version of its 5G home broadband service this week and partnered with Nokia for the deployment. Nokia is supplying 5G RAN and Fastmile 5G CPEs.
Experts believe decisions to opt for rivals will lead to increased profits for Huawei’s competitors. Operators are having to deal with potentially more expensive and less innovative equipment, in addition to slower rollouts due to less market competition.
Despite some opposition, Canada appears set to allow Huawei equipment in national 5G networks.
Scott Jones, Head of Ottawa’s Canadian Centre for Cyber Security, believes excluding telecoms equipment manufacturers will increase risks as – if a specific vendor’s equipment is compromised – it would represent a larger proportion of the network.
Huawei maintains it can, and would, refuse any government request to conduct surveillance or attacks on another country. An official last month argued that being caught even once conducting malign activity would be terminal for its global business.
Nokia CEO Rajeev Suri told Finnish state broadcaster YLE: “We’re following the situation closely. We’re here to help our clients when they need it.”
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