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Nokia Hopes This Will Drive Its Long-Term Revenues

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Part 6
Nokia Hopes This Will Drive Its Long-Term Revenues PART 6 OF 7

Nokia Eyes 5G for Revenue Growth

5G expected to bring revolutionary changes

According to Nokia’s (NOK) research report, 5G (fifth-generation) technology will change the way people work and live. The report stated that 5G will increase capacity by 40 times compared to 4G thereby, “Making it the only commercially viable technology for the delivery of a true immersive VR video experience to massive numbers of subscribers in high-attendance venues.”

Notably, 5G technology is estimated to reduce cost-per-device in smart city deployments, where millions of devices will be connected. The technology could achieve 99.999% reliability as well as low-latency. Nokia also expects “5G to the Home” to break even in four years, if ARPU (average revenue per user) is above 40 euros.

Nokia Eyes 5G for Revenue Growth

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5G technology might be available by 2019

Several tech heavyweights including Cisco Systems (CSCO), Verizon Communications (VZ), Ericsson (ERIC), and Intel (INTC) are all testing 5G technology, which is expected to be available by calendar 2019. These 5G connections could touch speeds of 100 Mbps (megabits per second) and are estimated to carry over three times the data of 4G LTE (long-term evolution).

Analysts expect Nokia’s revenue to fall a marginal 0.4% YoY (year-over-year) in fiscal 2017. Ericsson and Nokia have been impacted by lower broadband spending and the rollout of LTE in developed markets.

These firms are now looking at 5G to drive network revenue growth. IHS Markit expects the 5G market to touch the $2.0 billion mark in revenue by 2021, which will probably offset the decline in LTE for Nokia and its peers.

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