In a significant development for the European telecommunications sector, Nokia is set to win a contract to supply 5G radio equipment to Portuguese telecom operator MEO, according to an internal Nokia blog post and sources familiar with the matter. This contract marks a pivotal shift in MEO’s supplier landscape, which has been dominated by China’s Huawei for its 2G, 3G, and 4G Radio Access Network (RAN) equipment.
The agreement, though not yet officially signed, is expected to be announced as early as next month. This deal is a substantial win for Nokia, especially given the competitive pressure from established players like Huawei, which has been MEO’s exclusive supplier for previous generations of mobile network technology.
“MEO has been supplied in RAN only by Huawei. In other words, Huawei has had a 100% market share in 2G/3G/4G. We have now been selected to replace Huawei in some of the key markets in Portugal,” Tommi Uitto, President of Nokia’s Mobile Networks, wrote in an internal blog post seen by Reuters.
While Nokia and Huawei representatives declined to comment on the matter, and MEO did not immediately respond to requests for comment, industry insiders are closely watching this development. The move by MEO, which is one of Portugal’s leading mobile operators and owned by France’s Altice, signals a broader trend of European telecom operators diversifying their supplier base amidst ongoing geopolitical tensions and security concerns surrounding Huawei.
RAN equipment has traditionally been a major revenue driver for telecom giants like Huawei, Nokia, and Swedish rival Ericsson. However, a notable decline in demand for new equipment since last year has impacted both Nokia and Ericsson, prompting significant job cuts across the industry. According to research firm Dell’Oro, the global RAN market is expected to shrink by 5-8% in 2024.
Huawei, despite facing bans in the U.S. and several European countries over security concerns, continues to maintain a presence in Europe and holds a substantial share in China’s burgeoning telecom market. However, the potential deal with MEO could signify Nokia’s re-entry into Portugal’s RAN market, a market it lost to Huawei years ago.
This contract represents a critical win for Nokia as it aims to regain its foothold in the European telecom sector and capitalize on the ongoing rollout of 5G technology. For MEO, the shift to Nokia for its 5G needs reflects a strategic move to ensure a diversified and secure supply chain for its future network infrastructure.
As the telecommunications landscape continues to evolve, the upcoming announcement will be closely monitored by industry stakeholders and analysts, marking a new chapter in the competitive dynamics of the global RAN market.
