Nokia China boss apologies for missing out on mega contracts

Nokia China CEO Markus Borchert has written an open letter to apologise for missing out on a significant chunk of 5G business, as well as a mysterious letter which appeared in the press.

Last month it was announced China Mobile, the worlds’ largest telco, would award the vast majority of its 5G contracts to Chinese firms, with Ericsson collecting a small slither. Nokia was left out of the equation, a bitter pill to swallow considering the cash which would be spent by China Mobile over the coming months and years.

In the letter which was published in People’s Post & Telecommunications News, Borchert stated it would remain a committed partner to China Mobile, and perhaps there was a bit of damage limitation also.

“We hereby solemnly declare that the letter ‘Nokia Bell from Shanghai to China Unicom on March 31’ circulating online recently does not represent our position and attitude,” Borchert also stated.

The letter Borchert is referring to painted a relatively gloomy picture for competition in China. With a Nokia Shanghai Bell letter head, it was supposedly written by an employee who described ‘drastic price cuts’ as a reason Nokia missed out on the China Mobile contracts. The letter also questioned the ‘historical performance’ of various vendors.

While Borchert has said the letter does not represent the opinions and position of Nokia China, it comes at a time where the wider business is under severe pressure in the 5G world. Nokia missing out on a major contract might not raise than many eyebrows, but the coming weeks will give more insight into how much of a future the Finnish company has in China.

Over the course of 2019, Nokia China brought in €1.84 billion in revenue, an 18% year-on-year decline, though this sales drop was 25% for the final quarter. This was the only region in negative growth for 2019, and considering China Unicom is about to go through its own 5G tender, the next few weeks will be a very nerve-racking time for the team. Failure with China Unicom could see the end of Nokia as any sort of force in the worlds’ largest telecoms market.