Nokia recently announced that it had retracted its 5g plans in China's radio market after it failed to initiate contracts with the country's biggest mobile operators. The company then claimed that it would start refocusing on the sales of its other products to Chinese customers.
During a phone call with reporters, Nokia's CEO, Rajeev Suri, revealed that the company has decided to withdraw its efforts in joining China's 5G radio market. Reports claimed that Nokia failed to land contracts with China's largest mobile operators, such as Unicom, Telecom, and Mobile. These agreements were said to be Nokia's window to establish about half a million 5G base stations in the country.
The state-backed operators were said to prefer domestic suppliers, including ZTE and Huawei. Last year, Nokia expressed its distaste towards these issues and claimed that favoritism was on the rise in China's mobile market. It was also discussed that ZTE and Huawei curtailed western markets and that geopolitics might have been the cause of the preference trend.
Nokia allegedly failed and was unwilling to meet Chinese technical requirements to operate as a 5G company in the country. According to Nokia's chief financial officer Kristian Pullola in a conversation with Light Reading, Nokia steered its 5G research and development work to globalize its features. However, the focus would shit on more profitable markets since it failed to adhere to local customizations required by the Chinese government.
The report claimed that Nokia's failure to enter the 5G network in China might indicate its struggle to compete against rival brands in the industry. Ericsson was said to have gained market shares in China upon receiving 5G contract awards when it landed a deal with China Mobile worth 600 million USD.
According to the head of Ericsson's network business Fredrik Jejdling, the company is proud to have landed a deal with China Mobile. He claimed that China requires a steep technical qualification to enter its 5G network service and imposes a higher number of functionalities and features before a brand is welcomed into the country's mobile industry.
Last year, Nokia alerted its investors on 5G product difficulties that disrupted its margins and upset cost-saving targets. The company was partly blamed for integrating Alcatel-Lucent in 2017 as well. Moreover, the company was also under scrutiny for choosing expensive programmable 5G components that rendered its products less profitable compared to its rivals' gears. Hence, the report claimed that Nokia must find a solution to the problem before it can lessen the risk of the competitiveness of its price.
