Nokia Partners With Google to Build Cloud-Based 5G Network

While Nokia will bring its 5G expertise, Google Cloud will serve as the platform for launching applications and assist customers.

Nokia Partners With Google to Build Cloud-Based 5G Network

In October last year, Nokia chief executive Pekka Lundmark overhauled the Finnish company's 5G strategy

Highlights
  • Microsoft and Amazon are also tying up with telecoms vendors
  • Nokia cut 2020 operating margin forecast to 9 percent from 9.5 percent
  • Nokia is likely to find raising operating margins challenging

Nokia on Thursday partnered with Alphabet's Google Cloud unit to build 5G core network infrastructure and allow business customers to offer services such as smart retail and automated manufacturing.

Cloud computing units of big technology companies such as Microsoft and Amazon are also tying up with telecoms vendors ahead of deployment of 5G infrastructure to corner a share in new businesses the new technology might enable.

While Nokia will bring its 5G expertise, Google Cloud will serve as the platform for launching applications and assist customers in building an ecosystem of services.

"We will start to see some of these things to get in the live environment by end of this year," Amol Phadke, Managing Director at Google Cloud told Reuters.

He added that the timeline for the availability of the services would depend on telecom operators.

In October last year, Nokia chief executive Pekka Lundmark overhauled the Finnish company's 5G strategy. Announcing a new strategy under which the company will have four business groups, Lundmark said Nokia would "do whatever it takes" to take the lead in 5G where it lags Swedish rival Ericsson and Chinese group Huawei.

"We expect to stabilise our financial performance in 2021 and deliver progressive improvement towards our long-term goal after that," Lundmark said in a statement.

The company also cut its 2020 operating margin forecast to 9 percent from 9.5 percent and for 2021 expects operating margin of 7-10 percent.

JP Morgan analysts said higher research and development spending was likely to drive the margins lower than the consensus expectations of 10.9 percent for 2021. "Nokia is likely to find raising operating margins challenging due to its relatively low market share, Liberum analysts said in a note.

© Thomson Reuters 2020


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