Nokia reportedly in talks for a multibillion-dollar 5G contract with Bharti Airtel

STOCKHOLM: Finland’s Nokia is reportedly in discussions with Bharti Airtel for a multibillion-dollar contract for 5G telecom equipment as the Indian mobile operator looks to expand its network, according to three sources familiar with the matter.

India ranks as the world’s second-largest market for smartphones, with companies like Airtel, Reliance’s Jio, and Vodafone Idea pouring billions into upgrading their networks for 5G.

According to Reuters, Swedish telecommunications company Ericsson has already secured a multibillion-dollar contract with Bharti Airtel.

Last year, demand from India helped Nokia and Ericsson offset weaknesses in their US markets. However, the volume of orders from India has since slowed considerably following a surge in growth.

Nokia’s shares rose by 3% following news of the potential contract.  On Thursday (Oct 17), the company reported a 9% increase in third-quarter operating profit, with earnings before interest and tax (EBIT) reaching €454 million (S$647.60 million), up from €418 million last year, as reported by Reuters. This result surpassed analysts’ expectations of €424 million, according to an LSEG poll.

While several parts of Nokia’s business are showing signs of recovery, some segments continue to face challenges in the market. In the second quarter, Nokia reported an 18% decline in net sales, primarily due to decreased demand in India.

According to sources, the deal with Airtel would be for Nokia’s latest AirScale mobile radios, which support upgrading existing networks to 5G-Advanced and help reduce energy costs. One source described the negotiations as a “routine and ongoing arrangement” with network partners.

Last month, Nokia secured a portion of a US$3.6 billion contract from Vodafone Idea, shared with Ericsson and Samsung. In addition to Nokia and Ericsson, Airtel is also in discussions with Samsung about purchasing 5G equipment, according to another source.

Samsung has been working to expand its network equipment business but continues to trail behind Nokia and Ericsson. The company secured its first 5G contract with Airtel in 2022. Meanwhile, India has banned its mobile carriers from using 5G telecom equipment made by China’s Huawei. /TISG

Featured image by Depositphotos