Nokia misses massive China Mobile 5G tender

China Mobile, the largest operator in the world, awarded the vast majority of a CNY37.1 billion ($5.2 billion) 5G contract to local vendors Huawei and ZTE, with Finland-based Nokia left off the operator’s roster, Beijing News reported.

Huawei won 57.3 per cent of the value of contracts across 28 provinces, with ZTE taking 28.7 per cent, Ericsson 11.5 per cent and China Information Communication Technologies (formed by the merger of domestic equipment companies FiberHome Technologies and Datang Telecom Group in 2018) 2.6 per cent.

China Mobile kicked-off the tender for the second phase of its 5G rollout early last month, targeting expanding coverage nationwide with an estimated 232,000 base stations.

In its first tender, conducted in 2019, the operator selected Nokia and Ericsson alongside Huawei and ZTE, so the absence of the Finnish vendor in the second round comes as a surprise.

It was awarded 12 per cent of a mobility management entity device contract and 9 per cent of a system architecture evolution gateway tender, key parts of China Mobile’s 5G core network, in June 2019. At the time, the operator highlighted it would continue to work with domestic and international suppliers, despite sanctions imposed on Huawei by the US.

Nokia has struggled to gain market share in greater China, with Q4 2019 revenue in the region falling 25 per cent year-on-year to €469 million.

In early February the company said it excluded the market from its outlook “given that pursuing market share in China presents significant profitability challenges and the region has some unique market dynamics”.

China Mobile earlier said it completed the first phase of the 5G deployment covering 50 cities and is now targeting installing a total of 300,000 sites across the country by end-2020. It earmarked CNY180 billion for total capex, an 8.3 per cent increase from 2019.