Saturday, 29 February 2020

Fears over Huawei could see Deutsche Telekom give Nokia another chance

by Harry Baldock, Total Telecom
Monday 10 February 20

Uncertainty about Huawei’s future in Europe could be the window of opportunity Nokia needs to regain lost business with the German incumbent

As the German government continues to sit on the fence regarding Huawei’s place in its 5G infrastructure, Deutsche Telekom finds itself in an unenviable position with regards to its suppliers.   In 2017, Deutsche Telekom dropped Nokia as a supplier, replacing them with Ericsson…

As the German government continues to sit on the fence regarding Huawei’s place in its 5G infrastructure, Deutsche Telekom finds itself in an unenviable position with regards to its suppliers.
 
In 2017, Deutsche Telekom dropped Nokia as a supplier, replacing them with Ericsson. Since then, Deutsche Telekom has been reliant on Huawei for around 70% of its 5G infrastructure, with Ericsson taking the remaining 30%.
 
However, there are fears that the German government could take a position similar to that assumed by the UK last month – namely, limiting Huawei’s presence in the peripheral network to 35% – and meeting this cap would be a significant challenge for Deutsche Telekom. 
 
To mitigate this, a return for Nokia could be on the cards.
 
“As one of the major European manufacturers, Nokia is of strategic importance to Deutsche Telekom,” said Claudia Nemat, Deutsche Telekom’s head of technology and IT. “It is well known that Deutsche Telekom is pursuing a multi-vendor strategy so that we are not dependent on just one supplier. This is an elementary part of our security philosophy.”
 
However, documents written between July and November last year and leaked to Reuters show that Germany’s largest telco still consider Nokia to be the worst performing supplier in 5G. According to a briefing note prepared for Deutsche Telekom CEO Tim Hoettges for a meeting back in July, Nokia “must step up” if it is to secure a future relationship with Deutsche Telekom. 
 
Nokia’s struggle with 5G is well known, a situation which it blames on misjudged chipset sourcing.
 
Nonetheless, it seems Nokia is best poised to benefit from any potential Huawei-related fallout from the ongoing geopolitical situation. 
 
Samsung is also on Deutsche Telekom’s radar, but it is unclear if they could plug a gap left by Huawei as efficiently as Nokia in the short-term.
 
 
Also in the news:

 

Since you're here...

...the Telecoms industry is characterised by constant change and evolution. That's why it's crucial for telecoms professionals to keep up-to-date with what is happening. Join 35,000+ of your peers and sign up to our free newsletter service today, to be in the know about what is going on. PLUS, as a member you can submit your own press releases!

See all membership options

Please enable JavaScript to view the comments powered by Disqus.

Newsletter signup

Quickly get on board and up to date with the telecoms industry