Nokia has seen off competition to test a standalone 5G network for Germany's railways, putting it at the front of the queue for a future deal to support driverless trains.
The Finnish vendor will carry out tests in Hamburg for German railway owner Deutsche Bahn using a 5G technology called FRMCS, a successor to the GSM-R standard that already supports communications between trains and control centers in Germany.
Nokia would have been a natural choice because it is already Deutsche Bahn's largest GSM-R supplier and is willing to serve business customers directly through its new and fast-growing enterprise division, now led by strategy chief Kathrin Buvac.
Worried about competing against its telecom customers, Sweden's Ericsson says it will only work with other businesses if a telecom operator is involved. Like Nokia, China's Huawei is prepared to serve businesses directly, but it currently faces a backlash in the German market from politicians arguing that Chinese vendors are a security risk.
A Nokia spokesperson confirmed that no operator is involved in the Deutsche Bahn 5G project and that Nokia faced competition for the role.
The goal will be to determine whether FRMCS could be used to power highly automated trains on a stretch of track in the Hamburg area. During the tests, the companies plan to show how driverless trains can be "shunted" by transmitting control information over Nokia's 5G network.
FRMCS, which stands for "Future Railway Mobile Communication System," falls under the remit of the 3GPP, the main specifications group behind 5G technology. It has yet to be fully standardized, however, and is unlikely to be ready for use in a commercial environment for several years.
GSM-R, the existing system, is already used by Nokia to support rail operators in 22 countries, covering about 109,000 kilometers of track.
Nokia signed an eight-year GSM-R contract with Deutsche Bahn in 2015. The technology is used in various settings and has brought safety benefits by improving communications with trains that are passing through tunnels, according to the Finnish vendor.
While Nokia's mainstream 5G business has run into product issues, analysts have been impressed by the performance of the enterprise division, which made €910 million ($1 billion) in sales for the first nine months of the year, up 12% on the year-earlier period in constant-currency terms.
"It's time to get excited about the enterprise opportunity," said Stefan Pongratz, an analyst with Dell'Oro, in a recent research note. "Connectivity to support industrial IoT/Industry 4.0 is the primary driver behind Nokia's renewed enterprise enthusiasm."
Pongratz said drivers included the release of spectrum for companies outside the telecom market as well as the development of new industrial devices. Nokia believes its broad portfolio of fixed, mobile and software technologies will resonate with business customers, he added.
Nokia's entire business reported 2% year-on-year growth in constant-currency terms for the first nine months, to €16.4 billion ($18.2 billion).
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— Iain Morris, International Editor, Light Reading