According to a January 21,2024 article in the South China Morning Post, Nokia is set to exit its joint venture with Huawei in the telecommunications sector due to US-China tensions. Nokia has found new buyers for its majority stake in a Beijing-based joint venture with Huawei Technologies, after a proposed deal fell through last year following strong protest by the Chinese partner. The article states that Nokia will sell its majority stake in TD Tech [1.] to a group that will be jointly controlled by Huawei and a group of entities that include the government-owned Chengdu High-Tech Investment Group and Chengdu Gaoxin Jicui Technology Co, as well as venture capital firm Huagai, according to a disclosure published on Friday by the State Administration for Market Regulation (SAMR).
Note 1.TD Tech was originally a joint venture between Huawei and Siemens that was founded in 2005. In 2007, Siemens sold half of its stake to Nokia, and in 2013, Siemens sold all its shares, making Nokia the main shareholder at 51%. Huawei has long been considered the de facto controller of TD Tech with its 49% share ownership. Known for its wireless communications equipment, including 4G and 5G networking gear, TD Tech has a presence in more than 100 countries serving 8 million industry customers, according to its website.
Regulators said they had no antitrust concerns on the deal and would solicit public feedback until January 28th. Huawei and TD Tech together control no more than 10 per cent of China’s smartphone market, according to the SAMR, which did not specify the time frame for that data.
Huawei had a 14% share in the Chinese smartphone market in the third quarter 2023, putting it in fifth place behind its spin-off Honor and rivals Oppo, Vivo and Apple, data from market intelligence firm Counterpoint Research showed. According to Statista, Huawei had a 58% share of all 5G base stations in China as of the 3rd quarter 2023. Its closest competitor was ZTE with a market share of 31%. Nokia had only a 2% market share.
Bloomberg said that Huawei’s revenue surged 9% in 2023 to more than 700 billion yuan ($98.7 billion). That marked the fastest pace of growth in years thanks to a resurgent smartphone business and robust 5G equipment sales. On a quarterly basis, revenue climbed 27% to at least 243.4 billion yuan, based on Bloomberg’s calculations off the annual figure. That’s a sharp acceleration from the third quarter’s slight rise.