Nokia Corp (ADR) (NYSE:NOK) announced earlier this week that it had been granted by China Mobile Ltd. (ADR) (NYSE:CHL) more than 30% of its 100G optical network construction project, which aims to establish the biggest 4G network in the world.
Nokia’s Role
Nokia is primarily expected to provide its optical technology solutions in helping China Mobile materialize its Broadband China prospects.
Specifically, the company will install a 100G Optical Transport Network (OTN) and a Dense Wavelength Division Multiplexing (DWDM) backbone. This will enable China Mobile to rapidly and efficiently roll out its services, meeting the heightened demands of its massive 4G network user base.
This is just part of the longtime growing partnership between Nokia and China Mobile, the beginning of which can be traced back to more than 20 years ago.
Nokia’s Performance in the Chinese Market
During the previous quarter, Nokia had a 5% year-over-year decline in revenue in China. Nonetheless, this is still considered far better than the 6% year-over-year drop in revenue across Asia and the double digit year-over-year slumps internationally.
The Nokia Networks segment, which includes the Ultra Broadband Networks and IP Networks & Applications divisions, accounts for more than 90% of the company’s sales. In China, Ultra Broadband Networks revenue tumbled 6% year-over-year while IP Networks & Applications revenue surged 3% year-over-year. Rajeev Suri, Nokia CEO, indicated that the slowdown of 4G network upgrades have been affecting the competition in the Chinese market. By teaming up with China Mobile to work on its 4G network prospects, Nokia can potentially address the poor performance of its core business in the Chinese market.
OZO in China
On Thursday, Nokia has revealed that it is commercially launching OZO, the first virtual reality (VR) camera, in China in the third quarter. Presently, OZO is available in the US and Europe.
Ramzi Haidamus, Nokia Technologies President, emphasized that OZO has extensive potentials in the Chinese VR market as the technology boasts with cost-efficiency, professionalism, and user-friendliness.
As part of this Chinese market debut, Nokia has also signed a distribution deal with LeEco LeVR, enabling the latter to exclusively distribute OZO content.
