Nokia has clinched a new network deployment deal with Deutsche Telekom in Germany, signaling a significant return for the company to the heart of Deutsche Telekom’s commercial network. The deployment involves the implementation of an Open RAN network, allowing the incorporation of equipment from various suppliers in specific network segments. This progressive step will see the replacement of existing infrastructure from an incumbent vendor, with the transition already in full swing.
The setback for Nokia came last week when it lost a substantial Open RAN network contract to Swedish competitor Ericsson from AT&T. This loss impacted Nokia’s profitability targets, and future revenue, and led to a decline in its shares. However, the recent deal with Deutsche Telekom is being seen as a potential relief for Nokia, particularly in the aftermath of the loss to Ericsson.
The Deutsche Telekom deal, in collaboration with Fujitsu, underscores Nokia’s commitment to expanding its global footprint and diversifying its partnerships. Specific financial terms of the deal were not disclosed, but the partnership is expected to enhance Nokia’s position in the rapidly evolving telecommunications market.
In response to the AT&T setback, Nokia CEO Pekka Lundmark acknowledged the impact, referring to it as “bad news.” However, he reassured stakeholders that the issue is specific to AT&T, driven by financial considerations, and not reflective of broader technological or performance challenges.
To address the current market conditions in its mobile networks business, Nokia has revised its comparable operating margin target for 2026 from at least 14% to at least 13%. Despite this adjustment, the company remains optimistic about achieving its goals, outlining plans to revamp its mobile networks business by lowering its cost base. Nokia aims for a double-digit operating margin on sales of 10 billion euros by 2026, with an estimated requirement of approximately 11.5 billion euros in sales.
As the Deutsche Telekom project using Open RAN technology is already underway, Nokia is poised for a strong rebound in the coming year, showcasing its resilience and determination in the competitive telecommunications market.
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(via)
