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Technology Telecom Italia Likely to Cut Nokia Out of Mobile Network Upgrade

00:30  07 november  2019
00:30  07 november  2019 Source:   bloomberg.com

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Telecom Italia SpA will probably exclude Nokia Oyj from a mobile network upgrade and award the business to Ericsson AB and Huawei Technologies Co Telecom Italia is seeking tenders for a three-year project that may be worth about 600 million euros (5 million), and will decide on the award as

Telecom Italia is Italy ’s main ICT group and an important international player with TIM Brasil. Its offer, focused on advanced and integrated solutions. Ultrabroadband: Infratel and TIM sign agreement for use of fibre on the public network in 600 municipalities.

(Bloomberg) -- Telecom Italia SpA will probably exclude Nokia Oyj from a mobile network upgrade and award the business to Ericsson AB and Huawei Technologies Co., according to people familiar with the matter.

a close up of a cell phone: Five Carl Zeiss AG camera lenses adorn the rear case of a Nokia 9 PureView smartphone on display during a HMD Global Oy launch event ahead of the MWC Barcelona in Barcelona, Spain, on Sunday, Feb. 24, 2019. At the wireless industry’s biggest conference, over 100,000 people are set to see the latest innovations in smartphones, artificial intelligence devices and autonomous drones exhibited by more than 2,400 companies.© Bloomberg Five Carl Zeiss AG camera lenses adorn the rear case of a Nokia 9 PureView smartphone on display during a HMD Global Oy launch event ahead of the MWC Barcelona in Barcelona, Spain, on Sunday, Feb. 24, 2019. At the wireless industry’s biggest conference, over 100,000 people are set to see the latest innovations in smartphones, artificial intelligence devices and autonomous drones exhibited by more than 2,400 companies.

Managers at Italy’s biggest phone carrier recently told Nokia they’re concerned the equipment maker is lagging behind rivals on 5G, and that it will likely reduce its mobile network suppliers to two from three, said the people, who asked not to be named because the discussions are private.

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  Vodafone wants to end the dominance of Huawei, Ericsson and Nokia Vodafone is testing technology in Europe that could break the stranglehold on telecom equipment enjoyed by Ericsson, Nokia and Huawei. © Simon Dawson/Bloomberg/Getty Images Visitors walk past 5G branding during the launch of Vodafone Group Plc's 5G wireless network in London, U.K., on Wednesday, July 3, 2019. Vodafone switched on the U.K.'s second 5G wireless network on Wednesday, kicking off a commercial battle with dominant rival EE that could shape a decade of sales.

A mobile network operator or MNO (also known as a wireless service provider, wireless carrier, cellular company, or mobile network carrier) is a provider of wireless communications services.

check out T- Mobile ’s fine print.

Telecom Italia is seeking tenders for a three-year project that may be worth about 600 million euros ($665 million), and will decide on the award as soon as this month, the people said. No final decision has been made, and Nokia could still play a role as a mobile network supplier to Telecom Italia, alongside Ericsson and Huawei, the people said.

A spokesman for Telecom Italia declined to comment. A spokeswoman for Nokia declined to comment on commercial negotiations with customers, and said the company continues to see solid momentum in its 5G business. It has 48 commercial contracts and 15 live networks for the technology, including some of the world’s largest networks, she said.

Nokia's share price had one of its worst days ever on 5G woes

  Nokia's share price had one of its worst days ever on 5G woes Scale, captive customers, minimal competition—it should be a recipe for profits galore. But a profit warning pushed Nokia's shares down by 25% at one point today.At the time of writing, Nokia’s shares were down 20% on the day, hitting a six-year low.

Telecom network equipment maker Nokia is planning to cut thousands of jobs globally, including 1,400 in Germany and 1,300 in its native Finland, as part of a cost- cutting programme following the acquisition of Alcatel-Lucent earlier this year. In France, Nokia said on Wednesday it will cut only 400

Nokia has announced a collaboration with Telecom Italia to accelerate the adoption of new Internet services on mobile . Ovi, the gateway to Nokia 's Internet services, will be enabled on Nokia handsets offered by TIM. The agreement will make it easy for people to find and enjoy best-in-class Internet

Losing the business from Telecom Italia would be a setback for Nokia, which now supplies about 30% of the carrier’s wireless gear and employs about 1,400 workers in the country. The Finnish company is struggling to keep pace with its main rivals on 5G and last month cut its profit expectations and suspended its dividend to boost research and development on the technology.

While the loss may be another sign that Nokia is stumbling on 5G, the symbolic significance of the loss may outweigh the direct financial hit -- the contract is small relative to the Finnish company’s 11.3 billion euros of overall mobile equipment and service sales in 2018.

The tender is for work to improve Telecom Italia’s 15,000 radio access sites, including a buildout of 5G services at about 5,000 sites, the people said. Ericsson currently supplies about 40% of the carrier’s mobile equipment, and Huawei accounts for about 25%, they said.

Read More: Nokia’s Early 5G Wins Trail Rivals, Weighing on Sales, Margin

Telecom Italia Chief Executive Officer Luigi Gubitosi expects the move will help the company save money by enabling it to extract lower prices from its two suppliers, the people said. This can help it tackle its 29 billion-euro debt pile, one of the biggest in the European telecommunications industry.

To contact the reporters on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net;Niclas Rolander in Stockholm at nrolander@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Jennifer Ryan

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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