T-Mobile US (unconvincingly) backs Nokia, for now

TMUS and its radio kit partner issued a joint statement this week after an industry analyst suggested they could part ways, with Ericsson consequently in the frame to pick up some big business across the pond once more.

The news spread like wildfire, coming as it did from EJL Wireless Research founder Earl Lum, who this time last year predicted that Nokia would lose major client AT&T to Ericsson. We all know how that panned out, and indeed have spent much of 2024 looking at the impact of that AT&T Open RAN deal on both Ericsson and Nokia. Lest we forget, Nokia lowered its guidance as a result.

Lum's credibility as a forecaster of US mobile market moves triggered an immediate response from Nokia, which shared a statement of its own and – more importantly – one from T-Mobile US.

"T-Mobile works with both Nokia and Ericsson on our RAN, who have helped us over the years build the largest and fastest 5G network in the nation," the telco said. "We continue to work with them on ensuring our customers have the best mobile network experience. We have made no decision to end our working relationship with Nokia, and any reports in the media implying this are untrue."

At first glance that looks like good news for Nokia. But actually, T-Mobile is only denying the report that it has made a firm decision to ditch the Finnish company. Clearly, that could still happen.

And Lum makes a good case for it.

"Is there a real possibility of a strike out (0-3 in US baseball terms) for Nokia in the United States mobile market?" the analyst asked, referring of course to AT&T jumping ship last year and Verizon dumping Nokia for Samsung back in 2020.

"Our sources and channel checks say potentially and most likely, yes and if EJL Wireless Research was T-Mobile USA, we would from a purely technical perspective," Lum said. "[We] again believe, based on a thesis of technology and financial issues that Nokia may again be on the losing side of its battle with its Swedish competitor (i.e. Ericsson)."

Lum went on to outline his reasoning for that stance. His full LinkedIn post can be found here, but to sum up, it's basically about active cooling – fans, that is – on Nokia equipment.

"Ultimately, we believe that T-Mobile USA has been more than tolerant for 10+ years in trying to modernize the Nokia portion of their mobile network and putting up with the FANs and if Ericsson is willing to give T-Mobile USA the RAN deal of a lifetime, why would T-Mobile USA not accept the offer?" Lum said.

"It is apparent that Nokia can't slash its pricing to financially match whatever offer Ericsson has put on the table otherwise it would have done so with AT&T last year," he went on. "We have heard through our channel contacts that Nokia has begged and pleaded with T-Mobile USA and is willing to do whatever it takes to not lose the account. But, the reality is that T-Mobile USA has been asking Nokia for 10+ years to do the things they have asked for and Nokia has been unable to deliver, time and time again."

To say that's a pretty damning summation of the relationship between T-Mobile and Nokia is something of an understatement.

No wonder Nokia moved quickly to have its say.

"In response to some recent analyst claims, Nokia states that these comments mainly relate to its first generation 5G products designed in 2018. Since then, strong investment in R&D, System on Chip technology and new product launches have positioned Nokia as one of the market leaders globally," it insisted. "This is visible in the customer contracts we have recently won, increasing our market share in many regions including India, Japan, Brazil, New Zealand and Vietnam."

Indeed, on Wednesday morning Nokia revealed what could be a sizeable deal with Bharti Airtel in India...although there is a whiff of obfuscation about that announcement too.

It's a "multi-year, multi-billion extension deal by Bharti Airtel (Airtel) to deploy 4G and 5G equipment across key Indian cities and states," Nokia said.

Sounds huge. But there's a key word missing. Dollars, euros or rupees? There's a big difference. It could be an oversight, but Nokia uses that same phrase more than once in its release, so...

Nonetheless, the deal does back up the vendor's point above. It covers the supply of kit from its 5G AirScale portfolio including base stations, baseband units and the latest generation of Massive MIMO radios, all powered by ReefShark System-on-Chip technology.

You can't argue that Nokia is winning 5G RAN business. But whether it will hang on to its last remaining major US client is another matter entirely.

The market is not convinced. Nokia's shares nosedived when Lum published his thoughts, while Ericsson's went the opposite way.

Lum mused on whether T-Mobile would plump for Samsung kit, like Verizon did, in a bid to play the Korean vendor off against Ericsson, thereby potentially maintaining some price competition and vendor diversity. Ultimately he drew the conclusion that since AT&T clearly didn't see a huge risk in that area, T-Mobile will probably take the same view.

All of which puts all the market sentiment with Ericsson and leaves Nokia sweating.