Nokia says orders for fixed broadband equipment have increased by 22 per cent during the coronavirus pandemic as telcos around the world seek to boost capacity in light of additional demand.
Restrictions on movement and activity mean that many people are using their home connections for work, education, entertainment and communication with friends and family that they are physically prevented from seeing.
This enhanced importance has resulted in a significant increase in data traffic and makes reliability paramount. Nokia told Reuters that it expected customers to increase capacity by up to 40 per cent over the next four years but Covid-19 had necessitated more urgent action.
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The additional demand from customers is a boost for Nokia, which strengthened its fixed networking business through the 2016 acquisition of Alcatel-Lucent. Although mobile still accounts for the vast majority of the Finnish firm’s income, fixed and enterprise networking are growing areas of interest.
“Customers will need to accelerate the growth that they had planned in the future, and we’ve seen customers already talking to us about that,” Sandy Motley, Nokia President of Fixed Networks told the agency.
“We have seen some upgrades from our customers... but we think a lot of this drive will be more medium term and long term.”
Meanwhile, rival Ericsson has told investors it is writing down 1 billion SEK (£85 million) worth of assets in China. The Swedish firm said the adjustment was a result of its efforts to increase market share in the country, which is the world’s largest mobile market.
Ericsson has secured 5G contracts with all three major operators and although it has warned of negative margins in the short term, it believes the long-term profitability will more than compensate.
Strong momentum from network vendors, operators and the Chinese government means the country is expected to be an early 5G leader and offset and potential slowdown in the US and Europe caused by the pandemic.
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