Nokia Winning 5G Contracts Despite Delivery Delays, CEO Says
Nokia Oyj is winning contracts “quite handsomely” in new 5G telecom networks as the top three suppliers go head-to-head for the emerging business, Chief Executive Officer Rajeev Suri said.
“We compete quite favorably with Huawei, with or without the current security concerns,” Suri said in an interview with Bloomberg TV’s Caroline Hyde on Monday, referring to issues raised by the U.S. and elsewhere about China’s Huawei Technologies Co., the world’s largest network equipment manufacturer.
Against fellow Nordic competitor Ericsson AB, “we win two-thirds of the time,” Suri said, “compared to one-third of the time that they swap us out.”
The CEO is rebutting concerns from some analysts and executives that Nokia has fallen behind in the early phases of delivering products for the fifth generation of mobile networks. A few weeks of delays “is not really much” in the context of a 15-20 year cycle, Suri said. In the first quarter, the Finnish company struggled to book revenue from the contracts it had signed -- 42 globally thus far -- but now expects to start recognizing revenue “soon.”
He dismissed the idea that security concerns in Europe -- which have prompted some governments to tighten oversight of Huawei -- could delay the rollout of 5G in the region. The technology is immune to macroeconomic downturns as “‘you absolutely have to invest” in 5G, he said.
Customers are choosing Nokia because it can supply a full system of hardware, or what it calls end-to-end networks, complete with software and services, Suri said. About 35% of its pipeline consisted of end-to-end orders a year ago, and that’s now up to about 49%, he said, while about half of Nokia’s 5G contracts announced to date go beyond just 5G radio.
Industrial clients want to “buy the system” and don’t care where various components come from, Suri said. Nokia already has about 1,000 such enterprise customers and adds another 150 to 200 a year, he said.
Business from companies using private networks for the internet-of-things “will be fairly significant,” Suri said. “We see the big opportunities in manufacturing, logistics, supply chains, utilities, mining, all kinds of energy companies, water, wind farms, transportation, you name it.”
Suri estimated that there will be 15 million industrial sites that will require wireless connectivity over the next 10-plus years, in a subsequent Bloomberg interview. That compares with about 7 million base stations globally for phone carriers, currently. Countries leading the way include the U.S., Japan, Germany and China, he said.
Nokia gets about 5% of its revenue from the enterprise unit that includes industrial IoT and expects double-digit sales growth this year, up from a rise of 9% in 2018, the executive added.
--With assistance from Rebecca Penty and Caroline Hyde.
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at firstname.lastname@example.org
To contact the editors responsible for this story: Rebecca Penty at email@example.com, Thomas Pfeiffer
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