Nokia has announced the signing of optical data center connect (DCI) contracts with Baidu and Tencent, as the Finnish vendor continues to seek new business areas in China following its retreat from the country's 5G radio market.
The new contracts build on existing relationships with the two companies according to Nokia, noting its DCI solution is now present in 13 of China's webscale providers. The vendor said Tencent and Baidu are two of the top four China-based webscale operators – Baidu is the number one search engine, and Tencent leads in social media and online gaming
According to Markus Bochert, president of Nokia Greater China, the latest contracts with Baidu and Tencent "consolidate our presence in the webscale market in China, which we are confident will continue to flourish in the coming years."
Nokia is seeking new areas of growth in China following its decision to pull out of the local 5G radio access network (RAN) market earlier this year. It is targeting 5G core, IP and optical and non-telco clients as part of a broader enterprise push.
In the first quarter of 2020, enterprise sales rose 20% to €311 million (US$352 million). Although this segment still accounts for only 6% of group revenues, it is clearly growing fast.
Nokia still has a stake in China's 5G network market: it recently announced it won a 10% share of China Unicom's standalone 5G core network. However, local vendors Huawei and ZTE are likely to have picked up most of the contract.
According to a recent report from market research and analyst group Dell'Oro, Nokia's share of the overall telecom equipment market narrowed slightly from 16% in 2019 to 15% in the first quarter of 2020
- Nokia gives up on 5G radio business in China
- As Ericsson advances, Nokia's 5G business may be finished in China
- Nokia scrapes a sliver of China Unicom's 5G core
- Nokia adds Broadcom to 5G chip supplier roster
- Telecom equipment market gets off to weak start in Q1 2020 – Dell'Oro
— Anne Morris, contributing editor, special to Light Reading