Nokia Increased Profit After Huawei’s 5G Ban

Nokia Increased Profit After Huawei’s 5G Ban

The Finnish telecom equipment maker said Thursday that sales increased 7% in the second quarter to €5.7 billion euros ($6.3 billion). Analysts had expected revenue of €5.4 billion ($6.1 billion).

Demand for 5G networks is driving revenue higher at Nokia. The US campaign against Huawei isn’t hurting, either, CNN reported.

Nokia also said it has 45 commercial deals in place for 5G, and nine of those networks are already in course. The momentum could continue, in part because of security concerns facing Huawei.

Huawei has come under pressure from the Trump administration, which says the Chinese government could use the company‘s equipment for snooping. Huawei denies the allegations.

In May, President Donald Trump signed an executive order barring US companies from using telecommunication equipment from sources the administration deems a national security threat.

The United States has since said it would ease restrictions on the ban, but the details remain unclear.

“Some customers are reassessing their vendors in light of security concerns,” Nokia said in its earnings statement. Shares were up 6.8% in early trading.

Nokia, Ericsson, and Huawei sell networking gear that powers mobile phone networks. As wireless companies race to build out 5G networks, the three networking companies are competing to win contracts.

As of June, Huawei had won 50 commercial 5G contracts globally. Tommi Uitto, president of mobile networks at Nokia, told CNN Business last month that the political situation has opened the door for Nokia to grab market share.

On Monday the UK government said it needed more time to decide whether Huawei equipment should be banned from the country’s mobile phone networks.

 

Tamara Kuzmanovic

Writer and journalist for Serbian, Swiss, Japanese and Singapore media since 1996. A former correspondent from the United Nations in Geneva. Based in the Serbian capital Belgrade I've also lived in Switzerland for 12 years. Graduated from College for marketing communication with a degree in advertising, English and public relations. My father was a Serbian MP and Belgrade University professor.

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