Nokia ties the knot with Tencent for 5G R&D

Nokia has entered into a partnership with China’s internet giant Tencent to undertake 5G related R&D for webscale companies.

An MOU was signed in MWC Asia in Shanghai between the two companies to set up a full-fledged 5G lab in Shenzhen, China, where Tencent’s headquarters are. WeChat, the crown jewel of Tencent’s plethora of apps and services, is more a platform at the centre of an ecosystem than a standalone app. It has more than 1 billion monthly active users who make payments, hail car rides, order takeaway foods, among other things, as well as messaging, sharing pictures and videos, and networking that WeChat started out to do.

As Tencent further diversifies itself to other industries, including its recent entry into connected cars and autonomous driving, 5G’s promised capabilities, in particular edge-computing to vast reduce latency will be critical. By entering into a partnership with Nokia, which is strong in R&D, Tencent has a chance to influence how the 5G technologies can be applied to certain use cases. No wonder then the focus of the lab will be on selected verticals that Tencent has special interest in, with transportation, energy, entertainment, etc. being highlighted.

It is also a smart move by Nokia, who desperately needs to find new growth opportunities than selling more network gears to telecom operators, in particular when operators in Europe, Nokia’s traditional markets, are more cautious in rushing into 5G than their counterparts in North America and Asia.

As Nokia told Telecoms.com’s Jamie Davies, interest in 5G in Asia is more on the ways to scalability. This is an ideal case to test scalability. While it is an internet giant in every sense, Tencent is highly concentrated in China. For Nokia this would be a controlled experiment and would be valuable when it knocks on the doors of other local heavyweights like Alibaba, as well the truly global webscale companies like Google and Facebook.