Telefónica – Nokia alliance for private mobile networks to accelerate digital transformation for enterprises in Latin America

Telefonica d’Espagne wants to pursue private mobile networks for businesses in the Latin American region and has enlisted Nokia assist. The Spain-based telecoms group and its network equipment vendor partner are talking up their ability to bring about digital transformation for enterprises in Latin America. Through their newly-announced partnership the pair intend to offer Nokia’s portfolio of industrial-grade private wireless network and digitalization platform solutions, concentrating primarily on what they describe as “the most promising industries in the region;” that’s ports, mining, energy and manufacturing.

Juan Vicente Martín, Director for B2B at Telefonica Movistar Empresas Hispanoamérica, said: “In this unprecedented alliance, the benefits of LTE & 5G private wireless will enable Industry 4.0 across industries. With our strategic partner Nokia, we provide the best connectivity, enable greater optimization of operations, achieving important productivity and efficiency rates and contributing to the digitalization of the industrial sectors throughout Latin America.”

Néstor González, Head of Customer Team for Telefonica Corporate, Nokia, said: “We are thrilled to partner with Telefonica, combining our leading Industrial-grade private wireless solutions with Telefónica Hispanoamérica’s growing B2B solutions and services footprint, to jointly reach a wide variety of enterprises and industries throughout the region. We are very excited to be at the forefront of digital transformation for enterprises in Latin America which have tremendous potential for productivity gains from Industry 4.0. We thank Telefónica Hispanoamérica for their confidence in Nokia and we are looking forward to jointly deploying many new networks”.

Nokia has deployed mission-critical networks to more than 2,600 leading enterprise customers in the transport, energy, large enterprise, manufacturing, webscale, and public sector segments around the globe. It has also extended its footprint to more than 595 private wireless customers worldwide across an array of industrial sectors and has been cited by numerous industry analysts as the leading provider of private wireless networking worldwide.

Nokia has statistics to help encourage enterprises to make the leap into private wireless. According to a late 2022 survey by Nokia and GlobalData there were 79 multinationals that have deployed Nokia industrial-grade private wireless solutions. Nearly 80 percent of survey respondents expected to achieve ROI within six months of deployment.

Currently, private mobile networks based on 4G are probably more of an opportunity for Telefonica than 5G-based rollouts, the latest generation of mobile technology being still very much in its infancy in the region.

Indeed, according to the latest iteration of Ericsson’s mobility report, published a week ago, 4G subscriptions accounted for a massive 74% of total mobile connections in the region at the end of last year, with 5G barely figuring at all. The Swedish vendor calculated that there were just 7 million 5G subscriptions in total in Latin America at year-end, while operators added over 60 million 4G subs over the 12 months.

However, Ericsson predicts that 5G uptake will become more meaningful from 2024 onwards and that by the end of 2028 the technology will account for 42% of all mobile subscriptions in the region.

Consumer uptake of 5G does not necessarily directly translate to the state of play in the private wireless market, of course. But it gives us an idea of the maturity of the overall market.

Last September, Ericsson declared a “digital revolution…underway in Latin America,” when it announced the deployment of what it said was the region’s first private 5G standalone network with a wholly on-premises network architecture, operating completely separately from the public mobile network. The customer was conglomerate Nestlé, in Brazil, and the pair worked with network operators Claro and Embratel.

While Nestlé might be the kind of customer telcos and vendors dream about, there is clearly an opportunity to serve smaller and less well-known outfits too, regardless of the state of deployment of 5G.

Nokia noted that it has more the 595 private wireless customers worldwide across various industrial sectors, although it did not mention how many of those are in Latin America. Quite likely a few at most, but as the technology develops in the region, so will the market opportunity.