Telecom operators are accelerating their timelines for the roll-out of next-generation 5G networks, lifting Nokia’s confidence of an uplift for its business this year, Chief Executive Rajeev Suri said on Sunday.
The telecom network industry, dominated by China’s Huawei, Finland’s Nokia and Sweden’s Ericsson, is weathering the toughest part of a decade-long cycle as demand for 4G gear falls.
But the first commercial 5G roll-outs are due to begin this year and Suri said he expected large deployments in the United States, South Korea, Japan and China to take place sooner than what the industry could have expected a year ago.
“The confidence about where that 5G uplift comes from is understanding the accelerated timelines operators now have,” Suri told Reuters in an interview ahead of the Mobile World Congress taking place in Barcelona this week.
A year ago, operators were saying 5G rollouts would be big maybe at the back end of 2019, he noted.
“Now, it has accelerated by almost a year, which is good news for the sector, because then they’ll be the next wave of investment coming and we can base our timelines now off of knowing this.”
Nokia said on Sunday it had struck a partnership agreement with China Mobile - the biggest mobile operator globally by subscribers — to develop new 5G networks for industrial uses across the world’s most populous country. Europe, however, so far lacks the catalysts for rapid, large-scale 5G rollouts, he added.
“Far and away, the US and China activity will dwarf Europe ... (but) I think some 5G will be launched (in Europe) at some point in 2019,” he said.
Suri said he believed Nokia was well positioned for the 5G era, partly thanks to its 2016 acquisition of Franco-US Alcatel-Lucent that broadened Nokia’s portfolio.On Sunday, Nokia also hinted that it expected to announce a major deal with Vodafone, but declined to elaborate.
Among its smaller announcements, Nokia said it would collaborate with Facebook on high-speed, fixed wireless access technologies, and would acquire US software firm Umium to boost its wi-fi product offerings.
Nokia said last month that its stepped-up capital spending to win future 5G upgrade deals would weigh on profitability this year. It forecast an operating margin of 6-9 percent for 2018 and a rebound to around 9-12 percent in 2020.