A US ban on exports to China's ZTE over alleged Iran sanctions violations could play to the long-term advantage of rival network equipment supplier Nokia, the Finnish company's chief executive said on Thursday.
"It is too early to tell what the impact might be from ZTE," Nokia CEO Rajeev Suri said in response to a journalist's question on a conference call following Nokia's quarterly report regarding ZTE's standoff with US authorities.
"Longer term there might be opportunities particularly in the areas of mobile ... and optics," he said, referring to big business segments in which both compete, namely wireless network infrastructure and fixed-line optical gear to haul data traffic.
Nokia posted weaker-than-expected quarterly profits as telecom operators, particularly in North America, held off spending, but it expressed confidence that momentum was building later in 2018. The Finnish company, which competes with Sweden's Ericsson, Huawei and ZTE, both of China, said the battered network industry was poised to bounce back as commercial deployments for next-generation 5G networks would start to take off later this year.
"We see strong momentum building for the full year despite a slow start in networks... We have clear visibility to 5G deals for large-scale commercial rollouts in United States in the second half of the year," Suri said in a statement.
Most of the profit was generated by the company's profitable patent licensing business, which grew 136 percent. Nokia said it expected the global networks industry to fall 1-3 percent this year, a slight improvement from its previous forecast of a fall of 2-4 percent, and added its own sales would outperform the wider telecom equipment market.
© Thomson Reuters 2018