Nokia’s fixed networks business is seeing revenue momentum after a number of sluggish quarters. It continues to innovate in products to expand its partnerships and market reach, especially into the T2/3 markets, while putting in place the key elements of an overall access networks end-to-end solution.

Market Traction

After a few challenging quarters due in part to operators working through inventory and other post-pandemic disruption, Nokia reported a revenue upswing in its fixed networks division in recent quarters, with positive momentum expected ahead, powered in part by BEAD related spending, which is expected to start in the second half of 2025. Highlights include the recent OLT deal with AT&T (exclusive through 2029) and a deal with Bharti for over one million FWA Beacon units.

Product Strategy

Nokia continues to innovate on the product side and has shipped over 170M broadband devices to date:

• PON: Nokia is the only vendor that supports all PON technologies (10-25-50-100 GPON), positioning it well in a market where customers’ needs vary widely. It claims to have twice the XGS market share of its closest competitor. Most market traction is in XGS-PON with early demand for 25G PON emerging (though customers are paying the XGS price). Nokia says it expects demand for 50G will begin in 2025 and 100G in 2030. In our view, real market need for 25G is still far off, with no currently identifiable need for 50G or beyond. Nokia has shipped over 160M+ ONTs to date.

• FWA: Nokia views FWA as a fiber complement and brings to market innovative technology to use mmWave at scale. It is achieving over 6 Gb/s download and 1Gb/s upstream and does not see light of sight as a hurdle. Its strategy:
  • Partner with leading chip manufacturers
  • Build value on top of standard chipset design
  • Focus on sustainability

• WiFi: Nokia is investing heavily in in-home connectivity. Its WiFi 7 based solution can deliver up to 19 Gb/s and is a true WiFi 7 tri-band gateway. WiFi 6 deployments are beginning to accelerate while WiFi 7 is still minimal. For enterprise networks it relies on its partner Ruckus to deliver one software platform with integration of management stack for device management, control policy and security, network assurance, analytics for management and telemetry from PON to WiFi.

• Network Management:
  • Corteca for home management that uses the TR369 protocol for device and application management.
  • Altiplano access controller to detect network anomalies and analyze network utilization.
  • Partnership with Condor Technologies to broaden market reach to Tier 2/3 operators.

• Slicing for differentiated customer experiences. This is promising because there are emerging opportunities to offer more segmented and value-added services in the residential market. It will be interesting to see how this effort evolves.

Market Segments

Nokia is developing fiber solutions for newer customer segments as part of its “fiber for everything” strategy and is exploring new business models to align itself with the needs of the market.

• Cable operators: After selling a cable-focused business unit (Gainspeed), Nokia is developing solutions for cable operators. It is working with CableLabs on interop for 25G, investing in DOCSIS 4.0 in addition to FTTH and developing a DOCSIS adaptor for management. Nokia competes with more entrenched cable vendors whose solutions better align with the cable topology and operating environment.

• Rural broadband: Given massive spending to bridge the digital divide by governments and private entities, Nokia sees a significant opportunity in rural broadband and is investing heavily in this segment. It is the first vendor to comply with the BABA requirements, is working with local government and advocacy groups and is partnering with companies that specialize in building networks (an example is KGP broadband). It also has a marketing campaign to create awareness in rural markets.

• Low ARPU markets: For example, in South Africa’s VulaCoin where micro payments are used for pay-as-you-go broadband, provided as shared access among small dwelling units.

• Open access providers: Intrepid is an open access provider with $600 million in debt and equity financing primarily from Brookfield and is a major Nokia customer (including the NOC). Open access, the most intriguing market segment, is the natural evolution and aligns with the strategy of many operators that are seeking off-balance sheet investments in fiber (e.g., AT&T). Intrepid primarily targets areas with 20 to 60K homes and has CPCNs in 42 states. Today, they own up to the ONT but in the future want to own the CPE as well. Its major go-to-market customer is T-Mobile.