Telia picks Nokia for standalone 5G core in six markets

Nokia trumpeted a new five-year agreement with Telia Company that will see the vendor deploy 5G radio access network (RAN) technology for the Swedish operator's Finnish unit as well as 5G standalone (SA) core technology in six markets in the Nordic and Baltic regions.

Significantly, the six markets include Sweden, which is the home market of Nokia rival Ericsson. The other five are Denmark, Estonia, Finland, Lithuania and Norway.

Telia noted that the agreement primarily focuses on Finland, where Nokia will modernize Telia's 4G network and upgrade it to 5G. The agreement covers 7,500 sites. The new Nokia SA 5G Core solution will then be deployed in all of Telia's markets, "providing customers with entirely new capabilities over time."

Allison Kirkby, CEO of Telia, said Nokia "is our sole supplier of 5G standalone core in all markets and of radio network technology in Finland. We share a long history of close collaboration with Nokia, particularly in Finland."

Ericsson, meanwhile, scooped up 5G RAN contracts in Sweden and Estonia. The five-year, "multi-billion" Swedish krona deal involves modernizing the existing 4G networks and covers 10,000 sites. Ericsson also provides the 5G RAN to Telia in Norway.

"Telia Company is entering into two strategic partnerships, with Ericsson and Nokia respectively, which brings together three of the region's wireless pioneers to provide superior network experiences based on 5G and 4G technology to Telia's 10 million mobile customers in Sweden, Finland and Estonia," Kirkby said.

Telia Company launched its first public 5G network in Finland in 2019, followed by Norway and Sweden earlier this year with Denmark set to launch later this month.

COVID-19 continues to bite

Kirkby made the comments while presenting Telia's results for the third quarter of 2020, when service revenue increased 2.2% to SEK18.73 billion (US$2.1 billion), although the figure was 4.8% lower on a like-for-like basis. Adjusted EBITDA fell 0.6% to SEK8.21 billion ($938 million) on a like-for-like basis.

The operator said COVID-19 had an estimated SEK600 million ($68.5 million) impact on service revenues, driven by mainly lower roaming and advertising revenues. The estimated impact on adjusted EBITDA amounted to SEK300 million ($34.3 million).

Kirkby described the third-quarter results as "encouraging" and noted that Telia had been able to mitigate the effects of the pandemic through cost cutting.

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"We have now generated SEK9.2 billion ($1.05 billion) in operational free cash flow so far this year, and even though the fourth quarter typically is weaker from an operational cash flow perspective, we expect to end the year at the upper end of our guidance range," she said.

Jefferies said the overall result was solid, "but of somewhat mixed quality."

The operator also recently agreed to sell its international carrier business to Polhem Infra for an enterprise value of SEK9.45 billion ($1.08 billion).

"As a result of this transaction, and the divestment of our holding in Turkcell Holding (the receipt of the proceeds of which is expected imminently), the board have proposed to reinstate our 2019 dividend of SEK 2.45 per share, and we can now focus our strategy and execution entirely on the Nordic and Baltic region," Kirkby said.

Telia also announced the appointment of Per Carleö to the new position of head of brand. He most recently served as marketing director of Volvo Car Sweden.

Related posts:

• No Huawei for bidders in Sweden's 5G auctions
• Telia flogs international carrier business for $1.1B
• Belgian telcos drop Huawei for Nokia
• Ericsson sets sights on 5G gains in Europe amid Huawei backlash
• Telia sees $110M impact on Q2 revenue from COVID-19

— Anne Morris, contributing editor, special to Light Reading