Nokia equipment to build SoftBank’s 5G network
Nokia’s (NOK) 5G business wins continue. Japanese mobile operator SoftBank (SFTBF) has selected Nokia to supply it with equipment and technology for its 5G network. SoftBank is one of the mobile operators racing to build 5G networks in a bid to expand their revenue opportunities. 5G connectivity is expected to allow mobile operators to do more business with industrial customers. SoftBank is the parent of Sprint (S), the American mobile operator that is seeking to combine with its rival T-Mobile (TMUS) in a deal valued at more than $26 billion.
One of the reasons Sprint and T-Mobile have given for wanting to merge their operations is that doing so would allow them to rapidly deploy 5G networks across the United States. AT&T (T), one of the top operators in the United States, is already underway with 5G network rollout in the country. Last year, T-Mobile handed Nokia a $3.5 billion contract to supply it with equipment and technology for its 5G network project. T-Mobile signed a similar-sized contract with Nokia competitor Ericsson (ERIC).
Network sales contribute most of Nokia’s revenue
The SoftBank contract raised Nokia’s 5G commercial contract wins to 38, and now the company boasts 42 commercial 5G deals. Nokia derives the majority of its revenue from network equipment sales, and the company is counting big on 5G adoption to drive sales in its network business. Revenue in Nokia’s network business rose 4.0% year-over-year to $4.4 billion in the first quarter. 5G promises ultrafast Internet connections over wireless networks.