While India is set to overtake China to become the world’s most populous country in April as forecast by the United Nations, it is also keen to establish its position in the 5G landscape. Following rapid 5G deployment in China, the U.S. and other pioneering countries in 2019, India is now leading a new wave of 5G network rollouts. The government concluded its largest-ever spectrum auction in August 2022, and 5G services are already available in 13 cities. It also announced plans to set up 100 labs in top engineering institutions to develop apps and services for 5G networks. With more than 800 million internet users, India is well on its way to becoming a digitally advanced country.
Data is the new oil, as stated by India’s Prime Minister Narendra Modi. Demand for the new oil has been increasing, especially since initiation of the Digital India campaign in 2015. The shift toward a digital lifestyle and proliferation of disruptive technologies such as AI, VR/AR and IoT have also created fresh needs for faster and more reliable internet access. Conglomerate Reliance Industries Limited that originally built its wealth from the traditional oil business made a strategic move to expand into networks and data through the establishment of Reliance Jio. Now India’s largest telecom provider, Reliance Jio disrupted the country’s telecom industry by introducing 4G in 2016 and is leading the 5G expansion. The India market holds vast growth potential as it transitions to 5G, with projected revenues of US$168.8 billion over 2023 – 2031 at a CAGR of 43.8% (AstuteAnalytica, 2023).
5G technology cannot operate at full capacity without necessary infrastructure that is mainly made up of macro- and small-cell base stations with edge computing capabilities and Radio Access Network (RAN) towers. In fact, leading infrastructure providers have already started to beef up their presence in India. Both Nokia and Ericsson recently announced expansion plans to scale up production capacity to support network deployments of telecom service providers. To them, it is a chance of a lifetime as Chinese vendors including Huawei and ZTE were left out of the 5G race in the country due to geopolitical tensions. We believe Nokia is well positioned given its capabilities in edge computing and cloud infrastructure, as well as its partnerships with top tech firms.
Nokia
Strong 5G Product Portfolio
One of the largest home-grown companies in Finland, Nokia derived its name from the town Nokia where its factory was located in the 19th century. Most people see Nokia as synonymous with mobile phones, but with over 155 years of history, the company has reinvented itself multiple times. Today, Nokia is the world’s top three leading telecommunications infrastructure suppliers, with products ranging from hardware components to software solutions and network services. In a move to ditch its association with smartphones, Nokia rebranded and refreshed its logo in February 2023 to signal its expertise in networking and telecommunications equipment.
Nokia’s industrial research lab, Nokia Bell Labs, has been involved in multiple technology and telecommunications innovations. It has won nine Nobel Prizes and five Turing Awards for its work in the areas of semiconductors, coding, and artificial intelligence (AI). In 2021, Nokia launched its “ReefShark” chipset series, which leverages Nokia Bell Labs’ AI expertise and its own knowhow in silicon and antennas. The ReefShark chipset is smaller in size, lower in cost, and reduces power consumption by 75%. On top of a more competitive product portfolio, Nokia is gaining market share as competitors such as Huawei fade out due to geopolitical tensions. With the 5G rollout expanding across emerging markets, Nokia is well placed to benefit. It has secured multiple 5G rollout wins in Mexico, South America, Southeast Asia and the Baltics. India has been identified as a strong growth driver as Nokia has secured partnerships with the two largest local telcos: a 45% share of Bharti Airtel’s 5G RAN contract, and a major supplier for Reliance Jio’s planned 5G network deployments.
It is not just early-stage 5G rollout that Nokia is involved in. 5G-Advanced is already happening where private networks enabled by Nokia’s solutions are powering digital twin technology and industrial IoT. Nokia expects the Private Wireless Networks market to grow at 27% CAGR in 2021 – 30, and the company is set to be a leader commanding over half of the market share with 500+ customers (Nokia, 2023). For example, Nokia has partnered with automotive component leader Bosch to deploy 5G private networks in all 250 of its factories since 2020 (Bosch, 2020). By connecting machines and systems on the 5G network, Bosch is able to raise efficiency and lower operation cost. Recently, both companies jointly developed 5G-based precision positioning technology for new Industry 4.0 use cases where an enhanced private 5G network is able to determine the precise position of assets such as mobile robots and automated guided vehicles. By 2030, with the arrival of 6G and the metaverse, Nokia sees further growth opportunities which require its next-generation network support for high-performance connectivity. As Nokia continues to improve its product portfolio and streamline its operations, we believe it is well positioned to benefit from a more connected and data-driven world.
