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Why Nokia’s 5G Pilot with Telenor Is a Big Deal

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Telenor, a major Huawei customer, beckons to Nokia

Telenor will use Nokia’s (NOK) technology for 5G network trials in Denmark, Reuters reported. Huawei has been Telenor’s major supplier, and Telenor’s 4G network in Norway was built using Huawei equipment. Telenor’s decision to tap Nokia for its 5G network trials signals the operator may want to diversify its vendor base, which could open a huge business opportunity for Nokia. Telenor is based in Norway and serves 173 million subscribers across Europe and Asia.

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As we’ve seen in recent months, Nokia uses network tests to entice operators to purchase its equipment and technologies. Last year, Nokia secured a $3.5 billion multiyear 5G contract with T-Mobile (TMUS) after conducting 5G network trials with the operator. Early this month, United States Cellular (USM) handed Nokia a five-year 5G contract. While Nokia didn’t disclose the financial value of the US Cellular contract, it pointed out that the contract stemmed from 5G trials it conducted with the operator last year.

Nokia rising from the ashes

After years of shrinking sales since 4G deployments peaked, Nokia and fellow telecom equipment vendor Ericsson (ERIC) are banking on 5G equipment sales to turn around their fortunes. Nokia recorded a 3.2% YoY increase in revenue in the fourth quarter, which ended in December after the company reported several large 5G contract wins. Ericsson reported a 10% YoY increase in revenue in the December quarter.

Nokia is one of the vendors AT&T (T) selected to supply equipment and technology for its 5G network buildout. AT&T and Verizon (VZ) last year began providing 5G services in select markets in the United States.

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