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  • Huawei Ban Spurs New Competition for Ericsson, Nokia
    Bloomberg

    Huawei Ban Spurs New Competition for Ericsson, Nokia

    (Bloomberg) -- The U.S. ban on Huawei Technologies Co. was supposed to hand leadership of the lucrative market for wireless base stations to Ericsson AB and Nokia Oyj. It’s not working out that way.The crackdown on China’s largest technology company has given startups such as Altiostar Networks Inc. and new entrants including Qualcomm Inc. a rare opportunity to grab a slice of the $35 billion the telecom industry spends each year on this crucial part of mobile phone networks.“This could break up that tech vendor lock-in that’s been around for decades,” said Andre Fuetsch, chief technology officer of network services at AT&T Inc., the third largest U.S. wireless carrier. “It’s about how do you create a much more competitive, innovative ecosystem.”Base stations are the heart of cellular networks, powering millions of antennas that perch on cell towers and city rooftops all over the world. Until recently, these boxes were a proprietary combination of processors and software that had to be purchased all at once. Huawei, Ericsson and Nokia account for three quarters of this market, which is worth as much as $35 billion a year, according to researcher Dell’Oro Group.Open radio access network, or O-RAN, changes this by creating an open standard for base station design and ensuring all the software and components work well together -- no matter who is supplying the ingredients.This is a potentially radical shift. When telecom giants such as AT&T and China Mobile Ltd. want to expand their network they usually have to call their existing supplier and order more of the same because a box from Nokia won’t work with one from Ericsson. The new technology lets wireless carriers mix and match more easily.The initiative also means that new suppliers can succeed by focusing on one or two components, or a single piece of software, rather than spending lots of time and money building a whole base station from the ground up.O-RAN gear has been used sparingly since an industry alliance was formed to promote the technology in 2018. But when the U.S. toughened its stance against Huawei last year and encouraged other countries to crack down, interest in O-RAN adoption increased. The Chinese tech giant is a low-cost provider. Now it’s unavailable in some markets, carriers are more willing to look at alternative suppliers embracing the more flexible O-RAN approach.“Increased geopolitical uncertainty is helping them to get an invite to the table they would not normally have had,” Dell’Oro Group analyst Stefan Pongratz said. “Multiple vendors, not just in Europe but across the world, are basically reassessing their exposure to Huawei.”How Huawei Landed at the Center of Global Tech Tussle: QuickTakeOpen standard base stations will generate sales of about $5 billion in the next five years, more than originally predicted, according to Dell’Oro.Ericsson questions the performance and cost-efficiency of current O-RAN offerings. But the telecom companies, who decide where the money is spent, aren’t being shy about telling incumbent providers to get on board or risk being left behind.“We’ve been candid with them: This is the architecture that the operator community is pursuing,” said Adam Koeppe, who oversees technology strategy, architecture and planning at Verizon Communications Inc., the biggest U.S. wireless carrier.The list of companies vying to fill the gap left by Huawei is a mixture of some of the oldest names in technology and newcomers. Qualcomm, Intel Corp., Hewlett Packard Enterprise, Dell Technologies Inc., Cisco Systems Inc., Fujitsu Ltd. and NEC Corp. are offering various parts of the new base station technology. Startups such as Altiostar, Airspan Networks and Mavenir Systems are trying to carve out niches, too.O-RAN proponents point to the success of Rakuten Inc., a Japanese e-commerce provider that has used the technology to break into mobile phone services. The company began 4G wireless service in April and is upgrading to 5G now, using O-RAN suppliers including NEC, Qualcomm, Intel, Altiostar and Airspan. Rakuten said using this more open approach has cut capital expenditure by 40% and reduced operating costs 30%.Dish Network Corp. is building a 5G wireless network in the U.S. with help from Altiostar. New projects like this are great, but the real opportunity is with operators that are shifting their existing networks to O-RAN, according to Thierry Maupilé, Altiostar’s executive vice president of strategy and product management. The Tewksbury, Massachusetts-based company has raised more than $300 million from investors such as Rakuten, Qualcomm and Cisco.Why 5G Mobile Is Arriving With a Subplot of Espionage: QuickTakeO-RAN is part of a broader push to make all kinds of computer networks more flexible and easy to control. By standardizing hardware and using more software in centralized data centers, companies can run networks more cheaply, while fixing and upgrading them more easily. 5G will need this flexibility to work well.For AT&T, the new approach has already started to help. The company has introduced Samsung equipment based on O-RAN in areas where it had previously been limited to Ericsson gear, AT&T’s Fuetsch said.Nokia expects to have a full range of O-RAN offerings available in 2021. Some of the final standards aren’t yet set and they need to be completed and tested which will take time, according to Sandro Tavares, global head of marketing.“O-RAN is supported by more than 20 major operators around the world, so it is pretty clear that there is a strong push for it to happen,” he said. “This is a big move for our industry, and it is clear for the main players that we should not be cutting corners in this process.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Samsung Wins $6.6 Billion 5G Verizon Deal While Huawei Struggles
    Bloomberg

    Samsung Wins $6.6 Billion 5G Verizon Deal While Huawei Struggles

    (Bloomberg) -- Samsung Electronics Co. won a 7.9 trillion won ($6.6 billion) order to provide fifth-generation wireless solutions to Verizon Communications Inc. in the U.S., a big win for the electronics giant’s networking gear business.The contract was finalized Friday and is valid from June 30 through December 2025, it said in a regulatory filing.The deal marks one of Samsung’s biggest 5G contracts since Korea’s largest corporation decided years ago to invest in networking and compete with global players like Nokia Oyj and Ericsson in providing telecom equipment. It should lift Samsung’s market share in the wireless industry at a time leader Huawei Technologies Co. is grappling with U.S. sanctions and Washington’s effort to get allies around the world to shut out the Chinese company.Read more: Samsung’s Lee Looks Beyond Next 10 Years With 6G, System ChipsNokia’s shares fell as much as 2.5% Monday in Helsinki. Liberum analyst Janardan Menon cited past evidence that the Finnish telecom gear giant is losing share at the largest American carrier to Ericsson, potentially hampering its longer-term investment in technology.“With this latest long-term strategic contract, we will continue to push the boundaries of 5G innovation to enhance mobile experiences for Verizon’s customers,” Samsung said in an emailed statement.Samsung, the world’s largest memory chip and electronics gadget maker, has been pushing hard to expand its market share in the 5G equipment market and investing in sixth-generation mobile networks. The company didn’t provide further details about the Verizon deal. The U.S. carrier gained much-needed mid-band spectrum for its 5G rollout after emerging among the top winners in a recent U.S. auction of airwaves.(Updates with Nokia’s shares in the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    HMD Global Raises $230 Million for 5G, Overseas Push

    (Bloomberg) -- HMD Global, a Finnish smartphone manufacturer and Nokia Oyj licensee, closed a $230 million fundraising round that will help the company expand into growing markets such as India and Brazil.The company also plans to use the proceeds to partner with chipmaker Qualcomm Inc. to expand new fifth-generation wireless services to its handsets beginning in the first half of 2021, said Chief Executive Officer Florian Seiche.“This is another key area for us where we want to make sure that 5G is going to be available as fast as possible in the mid-tier price point,” Seiche said.HMD Global, previously valued at more than $1 billion, said it became profitable in the fourth quarter of last year. Alphabet Inc.’s Google, Qualcomm and Nokia Technologies were investors in the fundraising round, the company said.The Espoo, Finland-based company began operations in 2016 and now sells its Nokia brand smartphones in 91 markets across eight global regions.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.