Analysts have drawn attention to the significance of the newly announced fifth-generation (5G) network agreement between Nokia and T-Mobile.
The Finnish network equipment manufacturer stated earlier this week it will provide its end-to-end 5G portfolio of technology, software and services to accelerate the deployment of the nationwide 5G network of T-Mobile in the United States. The multi-year agreement between the two telecommunications companies is worth 3.5 billion US dollars, or approximately three billion euros.
“This is our largest 5G deal to date – in fact, it’s one of the largest-ever deals,” Phil Twist, the head of global marketing at Nokia, was quoted as saying by Reuters.
“A huge win for Nokia in the 5G domain,” tweeted Teresa Mastrangelo, a principal analyst at Broadbandtrends.
Inderes, a Finnish market research company, pointed out that the announcement validates Nokia’s high expectations for the latter half of the year. The network equipment manufacturer, it reminded, stated in its earnings call last week that it is close to announcing a major 5G agreement in the United States.
Also Nokia confirmed that the impact of the multi-billion-dollar agreement was taken into consideration in the forward-looking statements in its interim report for the second quarter.
Rajeev Suri, the chief executive of Nokia, has repeatedly affirmed that the network equipment maker is well-positioned to take advantage of the expected acceleration in the adoption of 5G technology in the second half of 2018.
“Nokia is well-positioned for the coming technology cycle given the strength of our end-to-end portfolio,” he stated in the company’s interim report.
Inderes estimated last week that the faster-than-anticipated adoption of 5G technology by wireless carriers could prove a problem for network suppliers such as Nokia.
“It’s somewhat ironic that the short-term challenges have to do with the fact that 5G is coming sooner than expected: customers operating on old budgets will demand more and higher speeds for the same money, and the supply chain won’t be able to deliver the speeds needed,” explained Mikael Rautanen, an analyst at Inderes.
“[Nokia's] comments about rising cost pressures aren't about competition but about the attempts of big clients to fund their accelerated 5G projects from the pockets of network suppliers,” he added. “Suri has stated that a few major clients are transitioning to 5G ahead of schedule, but they’ll have to fund [the transition] from their old budgets.”
Aleksi Teivainen – HT
Photo: Lluis Gene – AFP/Lehtikuva
Source: Uusi Suomi