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How Nokia Could Benefit from Huawei’s Woes

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Concerned Huawei customers consider Nokia

Huawei’s troubles with Western countries seem to be creating an opening for its rivals to feast at its expense. As Bloomberg has reported, more operators are asking about Nokia’s (NOK) 5G equipment now that some countries are banning Huawei from participating in the development of their 5G networks. According to Nokia CEO Rajeev Suri, the company will be there for operators when they need it.

The United States and Australia are some of the countries that have banned Huawei equipment from being used in their 5G network buildout. More countries are exploring similar moves. The reason some countries are shutting Huawei out of their 5G market is that they fear the company could help China spy on them. Huawei denies being China’s stooge. The company maintains that it operates independently and its products are secure.

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Huawei under siege and rivals are waiting in the wings

IHS Markit estimates show Huawei controlled 28% of the global telecom equipment market in 2017 compared to 27% for Ericsson (ERIC), 23% for Nokia, 13% for ZTE, and 3.0% for Samsung (SSNLF). Huawei risks losing market share if it’s not allowed to sell 5G equipment to its customers in America and Europe.

Samsung is also positioning itself to capitalize on Huawei’s woes. According to a report from Reuters, French operator Orange (ORAN) will use Samsung equipment for 5G trials in its home market. Huawei has been a top Orange supplier.

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