- Nokia just announced plans to recalibrate its private networks business
- The vendor is narrowing its focus, which could mean more measured growth
- Even so analysts expect it will remain a dominant force in the market
Nokia is shaking things up after a strategic review and moving its enterprise campus edge division into a portfolio companies unit, which means it could be sold off in around a year. But what does this mean for its broader private networking business? Is Nokia leaving private networks in factories behind to solely deploy private networks for utilities and on the rails? Not exactly, but the vendor does seem to expect that its operator partners will sell Nokia radios and core products to factories, ports and other smaller campuses.
Fierce has already reported CEO Justin Hotard’s reassurances that Nokia will continue to deliver discreet private networks to mission-critical companies offering services in areas like public safety, railways, and water and electricity utilities. These will, analysts noted, largely be multi-million dollar contracts, rather than the puny million dollar contracts that the enterprise campus unit has historically served.
“Nokia’s leadership position and commitment to the private 5G market remains unchanged,” Nokia said in a statement it sent to Fierce. “Nokia continues to sell radios for private wireless deployments together with Nokia and third-party core. As communicated at our Capital Markets Day, Nokia’s key customer segments include not only telcos, AI and Cloud, but mission-critical enterprises, including defense.”
Nokia is the number one Western vendor in the private networking game at the moment. The analysts at SNS Telecom & IT suggested that Nokia will remain a dominant force in private networking, even if it now sells 4G and 5G radios and more for private networking for campuses through its operator partners, rather than directly to enterprises.
“We've now spoken with a couple of folks at Nokia on the condition of anonymity. They say the divestment will be more of a sale of its DAC (Digital Automation Cloud) integration solutions than of its products, so Nokia still plans to supply small cell RAN and core network products for private wireless campus networks through service providers,” said James Bennett, director at SNS to Fierce.
Mission-critical vs. campus
As AvidThink principal Roy Chua has already said the narrower focus on mission-critical private networks likely portends a more measured growth rate for Nokia's private wireless business. Nokia must be hoping that operators still sell plenty of Nokia radios and core products for campus private networks as Nokia concentrates on those big-money mission critical contracts.
Whether that actually works out remains to be seen at this point. After all, at present, Nokia is only reviewing selling its campus edge unit, it hasn’t done so yet and likely won’t for 12 months.
So despite the surprise this week at Nokia’s private network announcement, everything is really all up in the air at the moment. We probably won’t see exactly how all this shakes out for months or maybe even years to come.