Nokia President and CEO Rajeev Suri expects 5G network deployments to be a major growth driver for the network equipment and services company.  In prepared remarks he said:

“For 2019 and 2020, we expect market conditions to improve markedly, driven by full-scale rollouts of 5G networks. As those roll-outs occur, Nokia is remarkably well-positioned. Unlike previous generations of technology, 5G requires a coordinated, holistic approach across all network elements, far beyond radio. That requirement plays to the strength of our end-to-end portfolio and our 5G Future X architecture.”

Investments necessary to take advantage of this growth opportunity will hit the bottom line in 2018, but this is expected to be temporary:

“As a result of the acceleration of investment in 5G due to the opportunity provided by the accelerated time frame of 5G deployments, Nokia’s operating margin will come under some pressure in 2018. That investment, combined with continued strong execution of our strategy to expand to new vertical segments, build a stand-alone software business, and maximize the value of our licensing business, will allow us to target improved results in 2020. Therefore, the Board is committed to propose a growing dividend, including for 2018.”

“We’re getting a good sense of what 5G is going to be like. It is clear the demand is there on the basis of capacity increase,” as well as from the B2B environment where industrial, utility and transportation companies are asking operators to give them 5G capability from a capacity and latency perspective.

Of course, we look at it differently from another peer or some other peers because we have an end-to-end portfolio. This really is a reinvention of the network as we know it,” he said. “Our operators, if they go end-to-end with us, will get the benefit of a lower TCO, so total cost of ownership, [and] a higher throughput at the network level, not just at the radio level but at the network level.”

Nokia this week announced its new ReefShark chipsets, which incorporate Nokia Bell Labs artificial intelligence (AI) technology as well as Nokia’s capabilities in antenna development for mobile devices and base stations. Nokia says the ReefShark chipsets significantly improve the performance of antennas, resulting in halving the size of massive MIMO antennas and reducing power consumption in baseband units by 64% compared to today’s units.

Suri also talked about Nokia’s expertise in network slicing, which he said would be a key component of 5G.

“There will be thousands and thousands” of network slicing, perhaps millions in the future, he said, and “our operators will be able to tap into the demand” of an SLA-based business where they can give slices to a group of clinics or hospitals, for example, including regionally and globally. “We would be able to slice the network at the network level,” he said, adding that somebody else who doesn’t have an end-to-end portfolio would only be able to do that at the core network of the radio, and that’s not good enough.

While Nokia’s results for 2018 are unlikely to impress, the company sees brighter skies ahead in 2019 and 2020 based on demand for 5G network technology. Nokia expects a dramatic improvement in profitability in 2020.

We remain skeptical, because we believe the pace of 5G rollouts won’t accelerate until the ITU-R WP5D IMT2020 standards are completed at year end 2020.  3GPP’s New Radio (NR) is one of several RIT proposals to be submitted for consideration later this year and in early 2019.

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Separately, Australian teleco Optus said will begin the rollout of its “5G” network early next year for ‘key metro areas’, as recent tests with network partner Huawei have attained 2Gbps speeds using commercial customer devices.

Optus MD of Networks Dennis Wong explained that Optus can now “increase momentum” on 5G due to 3GPP approval of “5G” New Radio specs last December: “Throughout 2018, Optus is going to lead the Australian market in the development and deployment of pre-5G and 5G technologies,” he said.

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Finally, Qualcomm and a handful of Chinese smartphone manufacturers are working together on a new initiative aimed at introducing 5G endpoint devices as early as next year.  The initiative will support China’s smartphone industry and seeks to introduce commercial devices that comply with 3GPP New Radio specifications as soon as 2019, Qulacomm said.

The companies will also explore artificial intelligence and IoT technologies under the 5G partnership, Qualcomm added.

“Qualcomm Technologies has close relationships within China’s mobile and semiconductor ecosystem, and we’ll continue to work with this ecosystem to drive innovation as we move from the 3G/4G era to the 5G era,” said Qualcomm president Cristiano Amon.

A recent survey conducted by Qualcomm shows that Chinese mobile users are showing unprecedented interest in 5G, with 60% of Chinese consumers are likely to purchase 5G smartphones when available.

Qualcomm announced its “5G Pioneer” initiative at the 2018 Qualcomm China Tech Day in Beijing last month.  At that time, Qualcomm executives were joined by representatives from six Chinese smartphone makers – Lenovo, Oppo, vivo, Xiaomi, ZTE and Wingtech.

Through the “5G Pioneer” Initiative, in addition to deep expertise and leadership in semiconductor solutions, Qualcomm Technologies anticipates being able to provide Chinese manufacturers with the platform they need to develop premium tier and global 5G commercial devices. Qualcomm Technologies, together with leading Chinese manufacturers, is not only exploring new mobile applications and experiences enabled by 5G, but also focusing on other transformative technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT) to continue to drive technological evolution and industry transformation worldwide.

“5G will bring massive new opportunities to the mobile industry, and we are excited to work with these manufacturers on this 5G Pioneer Initiative,” said Cristiano Amon, president, Qualcomm Incorporated. “Qualcomm Technologies has close relationships within China’s mobile and semiconductor ecosystem, and we’ll continue to work with this ecosystem to drive innovation as we move from the 3G/4G era to the 5G era.”

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China was picked to lead global 5G adoption by 2023. According to CCS Insight’s 5G forecast, 5G connections will reach 1 billion worldwide in mid-2023, and China will account for more than half of all 5G subscribers as early as 2022.  Meanwhile, China has many leading 3G/4G smartphone makers. According to Counterpoint Research, in 2017, seven of the top ten global 3G/4G smartphone manufacturers were from China.

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In a separate announcement, Qualcomm signed a MoU with Lenovo, OPPO, vivo and Xiaomi for multi-year purchases of RF front end silicon worth $2 billion.

Qualcomm said its RF front end modules will support China’s current mobile ecosystem and also address the rapidly expanding complexity and challenges of (true) 4G-LTE Advanced and “5G” networks.