Nokia Sets Sights on Networking
It’s been more than two years since Nokia has won any major wireless infrastructure business in North America, most recently losing out to Ericsson and Lucent Technologies for Cingular Wireless’ high-speed downlink packet access (HSDPA) upgrade. Mark Louison, senior vice president of Nokia Networks in North America, has the task of turning things around.
Nokia is the world leader in handset sales, owning about one-third of the market. But it’s also a strong player in infrastructure. Louison says Nokia Networks is No. 2 globally behind Ericsson (Siemens is a close third), and his aim is to grab the same position in North American sales.
That goal may be difficult to achieve, according to infrastructure analyst Peter Jarich of Current Analysis, who says North America is such a mature market for wireless networks that it is difficult for any of the vendors to build their market share. However, new technologies, such as Cingular’s HSDPA rollout, offer opportunities.
“While Nokia missed out on that opportunity, there is still T-Mobile ahead,” Jarich says, and one that Nokia might be particularly suited to for a couple of reasons.
One is Nokia’s new Flexi W-CDMA base station, which Nokia says is aimed at a cost savings up to 70 percent because of its size, ease of installation and decreased power consumption.
Second, Nokia recently signed a contract with T-Mobile International for HSDPA networks in Germany, the United Kingdom and the Netherlands. The German network launch was officially unveiled at CeBIT 2006 last week in Hanover.
The analyst also points out that Nokia’s Flexi base station uses a modular architecture that allows carriers to add new spectrum, should T-Mobile USA be successful in this year’s upcoming spectrum auctions.
SIZE MATTERS
Robin Lindahl, vice president of radio marketing and sales for Nokia Networks in Finland, says the Flexi base station squeezes the size of a normal W-CDMA unit by about 80 percent. The base station is designed primarily for W-CDMA but also could be used with multiple radios, even using WiMAX as an overlay. The Flexi, based on the Open Base Station Initiative goals, is due to start shipping in the second half of 2006.
Operator savings is the biggest benefit of the Flexi base station because it uses 60 percent less power than traditional base stations, which, Lindahl says, is one of the biggest network costs operators face. The 19-inch-wide Flexi also doesn’t need its own cabinet and can be mounted on walls, a floor or even on an antenna. Louison says Nokia will announce a Flexi solution soon with radios for 850 MHz (which T-Mobile USA uses), 1.7 GHz (which is being auction by the FCC) and other bands.
LET’S MAKE A DEAL
Nokia Networks announced 16 W-CDMA contracts in 2005 and was involved in 44 of the 100 commercially launched 3G networks, according to the company’s financial statements. It inked seven HSDPA deals last year for a total of 20 contracts. Nokia also signed 20 contracts for GSM/GPRS/EDGE in 2005 and was a supplier to 45 of the 121 EDGE operators. Additionally, the company tested IP multimedia subsystem (IMS) solutions with 20 operators and won 11 commercial IMS deals.
The Networks business was the second largest of Nokia’s four business groups, although well behind Mobile Phones. The Multimedia group was the fastest growing business unit and is approaching Networks in revenue, with Enterprise Solutions a distant fourth.
“Most folks in North America don’t realize that we are No. 2 in infrastructure globally,” Louison says. “We are a 6.5 billion Euro ($7.75 billion U.S.) mobile infrastructure supplier. That’s a pretty strong position.”
Without any CDMA business, though, and no plans to offer that interface, Nokia must concentrate on the GSM carrier business in North America. T-Mobile USA is its best opportunity because that carrier hasn’t announced any contracts to get it beyond its GSM/EDGE network. The carrier may be waiting on the spectrum auctions before it reaches a final decision, although there have been indications it wants to have W-CDMA up in some markets by the end of the year.
Louison says Nokia also has a strong position as an end-to-end supplier with core network offerings, applications and services. The latter is now more than 30 percent of the unit’s business, double what it was a few years ago.
Although the GSM/EDGE networks mostly have been built out in North America, Louison says, the carriers are looking at the next phase of EDGE, called EDGE Evolution, which provides higher data rates by combining time slots. Nokia’s EDGE Evolution averages data rates of 128 kbps, about double the current EDGE solution, with bursts up to 200 kbps.
As W-CDMA networks evolve beyond HSDPA, Louison says Nokia has a good story with its “super 3G” that includes the company’s Internet high-speed packet access (I-HSPA) solution. I-HSPA is Nokia’s answer to high data rates on the uplink and downlink, with 5.8 Mbps up and 14.4 Mbps down, using a standard HSPA radio interface.
Louison says Nokia also will make an announcement soon on a multiradio strategy that could include WiMAX and Wi-Fi. Nokia already is working in the Wi-Fi area, including unlicensed mobile access (UMA), which allows handoffs between a cellular and in-building Wi-Fi network.
What about the failure to win Cingular’s HSDPA business? Louison says Nokia executives were disappointed but see infrastructure deployments as a marathon and that the Finnish company is in the battle for the long haul. “We have a great relationship with them and have a strong 3G lineup,” he says. “We’re a leader globally in this area. Things can change in this industry all the time.”
And change is what Nokia Networks is looking for, especially in the United States.
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