Nokia CEO: Strong 4G essential to delivering high performance in 5G
Finnish telecom network infrastructure vendor Nokia reported a stronger-than-expected second quarter with a 7% rise in revenue from the previous year, boosted by revenue in North America and end-to-end 5G demand. Despite earlier predictions of a flat market, the company now expects slight market growth in 2019.
Nokia maintained its forecasts of full-year earnings per share at 0.25-0.29 euros, and 2020 EPS of 0.37-0.42 euros, and net sales increased 5%.
Since the peak of 4G network sales in the middle of the decade, the telecom infrastructure vendors have been met with a slowing demand. However, as anticipation mounts for new 5G technology, doors are opening for a new cycle of network upgrades, providing an opportunity for Nokia and its competitors to experience growth.
During the investors call, Nokia CEO Rajeev Suri revealed that Nokia has 45 commercial 5G deals — a few more than reported last month — and nine live 5G networks. “We have started to recognize 5G revenue, including in North America, and expect that recognition to build in the second half of the year,” he said.
Suri also noted, “While we continue to reduce our R&D legacy areas, our commitment to 5G is clear. Our end–to–end R&D capacity is larger than our European competitor [Ericsson], giving us the resources to catch up where we are behind, and to further distance ourselves where we are already ahead.”
He added that one area in which Nokia is ahead is in the 4G space, stating that a strong 4G layer is necessary to deliver high performance in 5G. “And our 4G has that strong performance,” he concluded.
Suri acknowledged the while Nokia’s progress has been “fast and meaningful,” the company “still [has]work to do” to remain competitive in the 5G game.