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Why Higher Mobile Broadband Sales Drove Nokia’s Revenue in China

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Feb. 16 2016, Updated 10:17 a.m. ET

Mobile broadband accounts for 54% of total Nokia Network sales

In 4Q15, Mobile Broadband accounted for 54% of Nokia Networks sales—up from 52% in 4Q14. Global services represented 46% of Nokia Networks sales in 4Q15. Nokia Networks is a business segment of Nokia Corp. (NOK). Revenues fell 5% year-over-year for Nokia Networks in 4Q15. Global services fell 6% year-over-year in 4Q15 due to lower net sales across all business lines, whereas Mobile Broadband revenues fell 2% due to lower sales in core networking technologies and lower resales of third-party equipment.

Overall radio technologies saw revenue growth driven by LTE (long-term evolution). On a constant currency basis, Nokia Networks sales fell 12% year-over-year.

Nokia Networks sales rose 12% QoQ (quarter-over-quarter), driven by growth in Global Services and Mobile Broadband. Global services sales rose 14% QoQ in 4Q15, whereas Mobile Broadband revenues rose 10% QoQ.

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Sales in Asia-Pacific fell 12% year-over-year

In 4Q15, Nokia Networks’ revenues fell 12% year-over-year in Asia-Pacific, driven by lower sales in Mobile Broadband and Global Services. While sales fell in Japan (EWJ), Vietnam, and Australia, they rose in India (INDA) and the Philippines. Sales fell 7% in Europe due to lower sales in Russia and Italy. North American sales fell 6% due to non-recurring IPR net sales.

Growth in LTE and core networking technologies increased Nokia Networks’ revenues in China by 17% year-over-year. Middle Eastern and African revenues rose 2%, mainly due to increased demand from Saudi Arabia.

Nokia’s share price rose 0.5% after it announced its 4Q15 results. Alcatel-Lucent (ALU) shares rose 2.7%, whereas NTT DoCoMo sales (DCM) rose 0.43%.

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