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A Look at Nokia’s 5G Network Push

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5G spending

Nokia (NOK) unveiled 5G First, a product that the company intends to help carriers upgrade their networks to 5G speeds to enhance the quality of their services.

Although the official 5G standard is still years out, that has not prevented carriers such as Verizon (VZ) and AT&T (T) from piloting 5G services as they prepare for the anticipated surge in wireless traffic stemming from IoT (Internet of Things) connections. With 5G First, Nokia is hoping to open a new revenue stream in its network equipment business by tapping the spending of carriers who are trialing 5G networks.

Research firm IHS Markit estimates that the IoT installed base could increase to 30.7 billion devices in 2020 and grow further to 75.4 billion devices in 2025. The IoT installed base totaled 15.4 billion devices in 2015. The chart above illustrates this growth in IoT.

Nokia goes for alliances to stay ahead of the pack

Nokia said its 5G First product has cloud core and shared data layer built into it, adding that the product is designed to offer 5G network transport services. While the company hopes to start shipping the product to carriers in 2H17, it continues to research and test its 5G products in hopes of staying ahead of the competition when carriers officially begin to upgrade to 5G networks. 

Toward that end, Nokia is building strategic alliances. The company has partnered with Intel (INTC) to develop new 5G products, and it has collaborated with Samsung (SSNLF) to test those products.

Eye on the cloud computing market

As Nokia develops its 5G network systems, it is focusing on the traditional carrier market and on cloud computing providers, which upgraded their infrastructure as demand for their services grew.

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