Nokia Sees Off Non-Chinese Rivals for China Telecom 4G Work

BARCELONA -- Mobile World Congress 2015 -- Finland's Nokia Networks claims to have emerged as the biggest non-Chinese equipment supplier to China Telecom during the operator's award of contracts for the second phase of its 4G deployment.

Nokia Networks made its boast on the opening day of Barcelona's Mobile World Congress and just days after China finally awarded LTE FDD licenses to China Telecom Corp. Ltd. (NYSE: CHA) and rival China Unicom Ltd. (NYSE: CHU). (See China Issues LTE FDD Licenses .)

In January, China Telecom was reported by China's C114.net to have chosen five vendors for its LTE FDD rollout -- Alcatel-Lucent Shanghai Bell, Ericsson AB (Nasdaq: ERIC), Nokia, Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- but it has yet to issue its own statement on contract awards. (See China Telecom Names Five LTE FDD Suppliers.)

The deal should provide a welcome boost to Nokia Networks: China revenues accounted for more than 12% of its total in the October-to-December quarter but declined by 3% year-on-year because of a slowdown in the LTE TDD market.

China awarded LTE TDD licenses 14 months ago, but the 4G plans of both China Telecom and China Unicom are based largely around the use of LTE FDD technology.

While TDD runs both uplink and downlink communications over one block of spectrum, FDD uses paired frequencies -- reserving one allocation for uplink and the other for downlink -- and is the system preferred by most international operators.

In China, mobile market leader China Mobile Communications Corp. has been able to build a commanding 4G lead after choosing to rely exclusively on LTE TDD technology, and it now serves more than 106 million 4G customers.

Yet to provide details of 4G take-up, China Telecom had 182 million mobile customers in September last year, including 113 million 3G subscribers.

Want to know more about 4G LTE? Check out our dedicated 4G LTE content channel here on Light Reading.

According to its statement, Nokia will provide a range of 4G technologies to China Telecom, including its Flexi Multiradio 10 Base Station and the NetAct-branded network management system.

It will also supply professional services covering network planning and implementation, network implementation, systems integration and what it calls "hardware, software and network competence development services."

"After Nokia Networks' pivotal role in enabling China Telecom's LTE network in 2013, our partnership with the operator has reached a new dimension with this development," said Markus Borchert, the president of the Greater China Region for Nokia Networks, in a company statement.

Even so, Nokia's statement appears to confirm the earlier report from C114.net that Chinese vendors Huawei and ZTE have secured the biggest shares of the planned work.

The overall value of the business also remains unclear. The report C114.net published in January suggested the second-phase contracts China Telecom had awarded at the time were relatively small, although Nokia seems unlikely to have issued its statement unless the LTE FDD deal was reasonably significant.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

Be the first to post a comment regarding this story.
Sign In