Nokia has secured a significant three year contract with Telecom Italia, becoming the operator’s largest 5G vendor and taking over a major share previously held by Ericsson. The agreement expands Nokia’s role in Italy’s 5G radio access network and marks one of its biggest market share gains in Europe.
The Finnish company described the deal as a landmark agreement that will increase its share of Telecom Italia’s radio access network by about 40 percentage points. This shift comes entirely at the expense of Ericsson, although neither company has disclosed reasons for the change. Market estimates suggest the gain could involve around 10,000 sites, based on the footprint of Inwit, the tower company that manages about 25,000 towers in Italy.
This marks the second time in two months that Nokia has been chosen to replace Ericsson in Europe. In September, VodafoneThree in the United Kingdom selected Nokia and Ericsson as its only 5G vendors in a major tender. Nokia gained 7,000 sites in that deal, including around 2,400 previously served by Ericsson.
Ericsson did not comment on the latest development but confirmed it still supplies 5G RAN products and the 5G core to Telecom Italia under a separate agreement. What remains unclear is how much Huawei equipment Telecom Italia still uses. Before 5G launched in 2019, Huawei supported more than half of the operator’s 4G sites. Recent data suggests Chinese vendors still serve about 35 percent of Italy’s 5G RAN network.
For Nokia, the Telecom Italia win is especially important as it continues to rebuild competitiveness in the 5G market. The company faced product challenges early in the 5G rollout and lost major contracts in the United States. Recent partnerships, including a one billion dollar investment from Nvidia for a three percent stake, have renewed investor confidence. Nokia plans to integrate Nvidia GPU technology into future 5G and 6G baseband products.
Telecom Italia will deploy Nokia’s AirScale technology along with its Habrok and Pandion radio units and extend the use of MantaRay, Nokia’s self organizing network platform. Habrok radios use advanced massive MIMO technology, while Pandion supports multiple frequency division duplex bands.
Despite this major win, Nokia’s mobile networks division continues to face financial pressure. In the third quarter, operating profit fell sharply to 12 million euros on revenue of 1.84 billion euros. With Europe accounting for only a small portion of global RAN spending, more such deals will be critical for Nokia’s long term growth.
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