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Nokia Mobile Networks Analyst Day 2024

Author: Shiv Putcha

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Nokia is a company undergoing dramatic changes

Nokia is a company that is undergoing dramatic changes, not only in terms of a rapidly declining external environment but also in terms of pretty stark shifts in its strategy and internal alignment. Under CEO Pekka Lundmark, the company had already initiated a shift away from the end-to-end positioning that was espoused by his predecessor, Rajeev Suri, towards organic business units that were fully integrated and with empowered decision making. Perhaps stung by the loss of high-profile accounts like AT&T and an effective total retreat from North America, Nokia’s recent guidance has not made for pleasant reading and likely has helped accelerate the transition plan that had already been initiated. To be fair, there have been gains from other markets which have helped offset some of the high-profile account losses and market spend declines.

Nokia’s CEO made candid remarks highlighting guidance pointing to a top line decline of 10-15% in mobile networks, primarily due to the sharp declines in spending from India as operators there wind down their spending post the first wave of investment in 5G networks. While external headwinds continue, Nokia believes that the market has likely seen bottom and their expectation is a rebound, if not a surge, in spending as there is plenty of investment left to make in 5G, with Nokia citing research suggesting that only about 30% of 4G LTE sites globally have been upgraded to 5G. Besides operators investing in new 5G networks and brownfield operators upgrading to 5G Advanced, Lundmark also highlighted government support for “secure and trusted networks” as a key driver for Nokia as it is benefitting from swap outs in some markets.  

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Nokia Mobile Networks strategic and design philosophies are in stark contrast to competitors

We had the opportunity to listen to keynotes from the leadership team at Nokia Mobile Networks (MN), including Tommi Uitto, Ari Kynaslahti, Mark Atkinson and others. There are a number of key takeaways that we noted about the Midsummer launches but also with the overall approach of Nokia MN relative to its key competitors.

• The resurgent symbolism of the Midsummer launch cycle – Nokia has locked into a cadence of major product announcements at MWC Barcelona and launches at Midsummer. While disorienting to those of us who live in the tropics, Midsummer’s bright and warm embrace is an ideal time to bring innovations to market and can also be interpreted as symbolic of a resurgent Nokia.
• Flexibility and breadth of portfolio – Nokia MN launched several new products cutting across small cells and massive MIMO base stations, for both indoor and outdoor scenarios, as well as new microwave products. While there was a common theme of smaller form factors and energy efficiency underlying all new products, it as also apparent that Nokia MN is taking a portfolio approach, with different products targeting different industry segments. The latter is an important distinction relative to competition, suggesting that the tremendous diversity in mobile operator networks needs multiple options, but also that Nokia is able or willing to invest in segments that some of their competition don’t. An example of this approach is the new Tuuli 26e baseband product, which supports compact outdoor sites from 2G to 5G. similarly, Nokia has launched a new range of “Kolibri” small cells, with all in one indoor and outdoor variants as well as an option for CBRS support.         
• Openness will deliver best performance/cost ratios – repeated many times, openness has become a key pillar of Nokia MN’s messaging and positioning. As a philosophical approach, this positioning is predicated on a new reality where operators want to shift from traditional subscription models to a more on-demand model, where capacity and connectivity demands are elastic. For Nokia MN, openness encompasses many tactical shifts including a major focus on areas like CloudRAN, which has seen Nokia MN partner with a diverse group of cloud players including AWS, Google Cloud and others. Indeed, a senior exec from AWS delivered a keynote that professed to major progress made with Nokia on their “AnyRAN” strategy. Nokia MN’s openness approach is also evident in their product launches being compliant with Open RAN specifications. Beyond CloudRAN, Nokia is also working with a number of partners for CPUs (Nvidia, ARM and Intel), Radios (Fujitsur, Mavenir and others), Container as a Service players (RedHat, Google Cloud and more) and even for hardware (Dell, HPE etc). 
• Extended leadership in backhaul – one of the lesser reported and analyzed stories about Nokia MN is their leadership in backhaul solutions. Beyond fiber, for Nokia MN, this means microwave where they have been a leader for some time with their Wavence product line. This product line now extends to the E-band with the UBT-mU small form factor product, which can carry an average capacity of 10 Gbps, which is ideal for urban and hotspot deployments. E-band microwave solutions can be really effective for use cases like FWA. While FWA demand is surging, it is tough for operators to run fiber to every base station that is enabled for the service, both for cost and topological reasons.

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Energy efficiency has become a core mantra

Another oft-repeated mantra for Nokia MN throughout the sessions was energy efficiency as a core design principle. This message is hardly unique to Nokia but it was telling to see the holistic way in which crucial requirement for mobile operators is being approached within the company. Beyond claims of % savings for new products, there is an inherent recognition that energy efficiency will come from better hardware and software designs, with a healthy dose of AI sprinkled in for iterative learnings and efficiency gains.

• On the hardware side, Nokia’s ReefShark SoC’s are driving efficiency gains as are in-house RFIC designs for Wavence microwave products.
• On the software side, lower energy consumption through new features like intelligent switch-off of idle radios, extreme deep sleep and improved use of AI/ML will all make a big dent.   
• Zero footprint and low-footprint site solutions with liquid cooled baseband technology will help lower cooling system energy consumption by up to 90%.
• Nokia is also working on implementing AI in all of their digital services offerings to customers, including digital twins for network design and optimization; site infrastructure design, and also for deployment related services like Nokia AI Digital Assistant.

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Honorable mentions

We would be remiss not to briefly mention a number of the other initiatives that Nokia is working on. These include a big push on network APIs through their “Network as a Code” platform in partnership with aggregators like Infobip and cloud providers like Google Cloud.  Nokia MN is also a member of the recently created AI-RAN Alliance that is pushing for increased usage of AI in the RAN for driving increases spectral efficiency, for allocating idle RAN resources for AI workloads and also using AI to drive increased efficiencies at the network edge.

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Future outlook

There is no immediate easing of the external headwinds that are facing the industry. That said, Nokia MN appears to finally be emerging from its transition period with a refreshed portfolio of products that cater to multiple industry segments and deployment scenarios, while also keeping openness and energy efficiency as core design principles. Nokia MN has a lot riding on their bet that operators want increased flexibility and choice for their networks. While Nokia has doubled down on its strategy and recent investments, a lot will ultimately depend on operator strategic choices – double down on purpose-built networks or opt for optimized, “open” solutions that offer elastic “on-demand” capacity.