What’s up with… Nokia and Huawei, RAN market contraction, Altice Portugal

TelecomTV Staff
By TelecomTV Staff

Jan 22, 2024

  • Nokia offloads stake in its JV with Huawei 
  • The RAN market is in decline, finds Dell’Oro
  • More than 20 bids tabled for Altice Portugal

In today’s industry news roundup: Nokia has finally found a way to offload its stake in TD Tech, its legacy Chinese joint venture with rival Huawei; the global market for radio access network (RAN) equipment slumped in 2023 and will decline further, forecasts Dell’Oro; Altice Portugal has already attracted 23 non-binding bids, according to local reports; and much more! 

Nokia is to offload its stake in TD Tech, its China-based joint venture with Huawei, citing concerns about increasing US-China tensions. According to The South China Morning Post, it will sell its majority stake in the mobile networks, IoT and device technology vendor to a Chinese group that includes several state-owned entities. Despite lots of PR guff that was churned out about the equality of the two partners in the JV, which has headquarters in Beijing and Chengdu, the reality was that Huawei was always the de facto master of TD Tech, which has been selling rebranded Huawei handsets since 2021. Last year, Nokia tried to extricate itself from the unequal relationship by selling its share of the company to New East New Materials, a Shanghai-based ink technology outfit, but that plan did not sit well with the Chinese authorities. Political pressure was brought to bear, Huawei kicked up an almighty fuss and said that unless Nokia changed its mind it would stop licensing technology to TD Tech, a threat that killed the deal. However, almost a year on, under the terms of the now finalised exit agreement, which was published on Friday last by China’s State Administration for Market Regulation, TD Tech will henceforth fall under the aegis of Huawei and several other companies that are either fully or partially owned by the Chinese state, including the Chengdu High-Tech Investment Group and Chengdu Gaoxin Jicui Technology Co. Also involved is the Chinese (nominally private and independent) venture capital outfit, Huagai. Details of the equity share distribution between the new ‘owners’ have not been made public. Under the terms of the JV, Nokia owned 51% of TD Tech and Huawei held 49%: The reality was that the tail wagged the dog. Unsurprisingly, the new deal passed the scrutiny of the Chinese regulatory authorities like several metres of shantung silk being slipped through a lightly oiled 24 carat gold ring. TD Tech was founded in 2005 as a joint venture between Huawei and Siemens of Germany. In 2007, Siemens sold half its interest in the partnership to Nokia as part of the deal that saw the Finnish vendor acquire network infrastructure vendor Siemens Communications, and six years later, in 2013, the German firm sold the rest of its shares to Nokia. And talking of Sino-US tensions, it is, shall we say, ‘interesting’ that of the Huawei handsets rebadged as TD Tech, the M40 5G reportedly does not use Huawei’s very own Kirin processor but instead comes embedded with a 7nm microprocessor supplied by MediaTek of Taiwan.

The value of the global market for radio access network (RAN) equipment is set to decline for the second consecutive year from its $40bn-plus zenith in 2022, according to research house Dell’Oro Group. With telcos in multiple markets, but particularly the US, tightening their purse strings last year (causing the likes of Ericsson and Nokia considerable top-line pain), the value of the RAN market declined “sharply” year on year in 2023, according to the research firm, and is set to shrink slightly again this year, though there is no expectation that another sharp dip will occur in the coming years. The main cause of the market’s decline, after consecutive years of 4G- and 5G-fuelled growth from 2017 to 2022, is a massive drop-off in telco investments in traditional mobile broadband network systems, as most network operators have completed large parts of their 5G rollouts. There are pockets of the market that are set to see increasing telco investment, though,  including  mmWave, massive MIMO, private mobile networks, small cells, virtualised RAN and Open RAN. According to a blog written by Dell’Oro vice president Stefan Pongratz and published by SDX, the global RAN equipment market will be worth more than $35bn in 2024, with Open RAN investments accounting for between 7% and 10% of that total, so between $2.45bn and $3.5bn.    

Still with the Dell’Oro team’s crystal balls… The global market for optical DWDM (dense wave division multiplexing) network equipment will grow over the next five years to be worth about $18bn by 2028, with that growth driven by investments in a new wave of coherent digital signal processor-based line cards capable of delivering wavelength speeds of more than 1 Tbit/s. Read more.   

Competition to acquire Altice Portugal (aka Portugal Telecom or Meo) is intensifying, according to a report from Jornal Economico (in Portuguese, subscription required). According to the business news site, 23 non-binding bids have already been submitted to Lazard, the bank that is handling offers for the Portuguese telco operation of Patrick Drahi’s heavily indebted Altice International. And more might be tabled, as Altice is allegedly happy to consider any non-binding offers submitted before the end of January. Among those believed to have already submitted bids reportedly valued at between €6bn and €9bn are private equity firm Warburg Pincus (in partnership with the former chairman of Credit Suisse, Antonio Horta-Osorio), Saudi telecom giant STC (which has already been busy on the Iberian peninsula), Iliad owner Xavier Niel, Apollo Management and CVC Capital Partners. Altice International is seeking to sell some of its assets to help slim down its massive $60bn debt pile but will be loath to accept anything other than top-dollar offers.

Indian vendor HFCL, best known for its optical transport technology products but also features radio access units and antennas in its portfolio, has announced a 6.23bn Indian rupees ($75m) contract for “the supply of indigenously manufactured 5G networking equipment. This is [the] first such large order for 5G networking equipment placed on any Indian company by any telecom service provider,” added HFCL, which didn’t name the customer or specify which product lines had been ordered. Earlier this year, HFCL bagged a $135m optical network equipment deal from state-owned Indian telco BSNL.    

Here’s an interesting new Japanese technical development that could have significant implications for telecom networks. The latest edition of Physics Magazine reports on the discovery that at low temperatures, crystals of lithium nickel phosphate can work as an optical diode in the near infrared (IR) spectrum to transmit light in one direction only. Quite a few materials will work as optical diodes in the frequencies of light visible to the human eye, but it has taken considerable time and effort to find, test and demonstrate an optical diode that operates in the near infrared frequencies used in telecom networks. Now, though, two Japanese scientists — Kenta Kimura of the Department of Materials Science at Osaka Metropolitan University and Tsuyoshi Kimura of the Department of Applied Physics at the University of Tokyo – have demonstrated strong near-IR optical-diode effect (ODE) for lithium nickel phosphate. In a research environment, Kimura and Kimura observed that nickel’s electronic- and magnetic-dipole transitions are practically adjacent and exist in near IR. It’s complex but, in essence, optical frequency magnetic dipole transitions are processes in which the magnetic field of electromagnetic radiation causes a change in electronic states via the absorption or emission of a photon. Kimura and Kimura grew crystals of lithium nickel phosphate and found that absorption along one crystal axis was 2.3 times greater in one direction than in the other. The ODE was present for wavelengths of 1410 nm up to at least 1690 nm and the application of an external magnetic field flipped the spins and so reversed the ODE, an attribute that is both reversible and repeatable ad infinitum, making possible the transmission of light (and therefore the transmission and switching of data) in one direction without interference. Their paper, ‘Nonvolatile Switching of Large Nonreciprocal Optical Absorption at Shortwave Infrared Wavelengths. A Large Optical-Diode Effect at Telecom Frequencies’, was published on 17 January. Physics Magazine is the free, online magazine from the American Physical Society. 

- The staff, TelecomTV

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