Your browser is not supported. Please update it.

6 October 2020

Major deal with BT may show Nokia turning a corner in the 5G market

Nokia has had a tough time in the 5G market for the past few quarters, following an enforced U-turn in its radio processor architecture and reports of being sidelined in Verizon’s deployment. Yet with Huawei facing even greater challenges in many markets, it is essential that Nokia is able to capitalize on that quickly, and last week brought a welcome ray of hope, in the shape of a major 5G deal with UK incumbent BT.

Nokia is to be the primary 5G RAN supplier to BT, which had been working closely with Huawei until the Chinese firm’s equipment was banned from 5G network by the government. The price tag was not revealed but the deal will see Nokia supplying its AirScale RAN hardware and software and its cell site gateways on a national basis. The vendor currently supplies BT only in Greater London and a few other locations.

It will also provide optimization and modernization services for BT’s legacy 2G and 4G networks. One of the key points raised by BT executives during parliamentary hearings about potential bans on Huawei was that a ban would not necessarily lead to a more open 5G supply chain, because newer RAN vendors, including Samsung, do not support 2G and 3G.

Many operators, especially in Europe, aim to keep older networks running for many years, but to increase efficiencies, they want to replace ageing equipment with an integrated SingleRAN solution that supports all the radio generations. Huawei had been a pioneer in this area, but Nokia and Ericsson also supply multi-RAT solutions, as do a few small cell vendors (this may have been one reason for Mavenir to acquire small cell supplier ip.access – see separate item). Nokia’s deal will include the Single RAN (S-RAN) portfolio for indoor and outdoor coverage.

BT has until 2027 to rip out Huawei 5G or SingleRAN equipment which is already in place. The company is already in the process of migrating to an Ericsson core – its mobile subsidiary, EE, previously used a Huawei packet core.

Although BT was cautious about open RAN solutions when lobbying to keep Huawei in play, it has shown interest in them in other areas, particularly when building greenfield or enterprise networks. And the telco is a prominent participant in open network initiatives such as Telecom Infra Project, and an early adopter of OpenStack to support virtualized networks. It will collaborate with Nokia, it said, to develop open RAN systems and encourage the ecosystem to expand. Nokia has thrown its weight behind the O-RAN Alliance, presumably in a bid to lead that market rather than be crushed by it.

According to Neil McRae, BT’s chief architect, Nokia appears to have addressed the challenges with its processor architecture, and he highlighted two key reasons for giving the Finnish firm such a prominent role in the 5G roll-out.

“Firstly, Nokia is working towards a cloud-native radio architecture, which really supports our cloud-native ambitions,” he told TelecomTV. “Secondly, there’s the performance. You know it’s clear that in the past Nokia has had some challenges, but I think over the past year-and-a-half, they’ve really turned it around and the performance, we’re finding, is really fantastic.”

BT also emphasized an advantage that has lain at the heart of Nokia’s competitive positioning against Ericsson since the acquisition of Alcatel-Lucent – its end-to-end capabilities. Nokia supplies products in various parts of the BT network, but has been particularly successful in edge and core routers.

Nokia claims it now has 100 commercial 5G deals and a total of 160 commercial 5G engagements, including paid trials. It added 17 new 5G commercial deals in the third quarter. The company has not only outstripped Ericsson and Huawei in open RAN, but also in enterprise cellular, where it has been offering 5G private network products since July, as well as LTE-based systems, and cloud-based hosted core services. Enterprise customers now make up 12% of Nokia’s 5G deals, it said in a recent statement, with recent private wireless wins including Deutsche Bahn, Toyota and Sandvik.