Nokia CEO says carriers face substantial 5G investment needs

tech.hindustantimes.com:

The chief executive of Nokia Oyj signaled that a near-term decline in operator demand for 5G gear in a worsening economy will turn out to be a passing phenomenon given a “substantial need” to invest in those networks globally.

Nokia on Thursday reiterated that challenges stemming from a deteriorating economic outlook and customers working through existing inventory intensified in the second quarter and are set to continue in the second half. It had made similar remarks last week when cutting its full-year guidance.

“We are of the opinion that this has to be a question of timing because data traffic continues to grow 20 to 30% per year globally,” Chief Executive Officer Pekka Lundmark said in an interview. “In Mobile Networks there is still substantial need for operators to invest in 5G globally with only approximately 25% of the potential mid-band 5G base stations so far deployed outside China. ”

Nokia on Friday delivered an unscheduled profit warning, downgrading its full-year guidance due to a weakening fifth-generation mobile equipment market. It's facing macro-economic headwinds as customers continue to work through inventories that had grown during global supply-chain disruptions. Nokia's move came on the heels of a gloomier outlook from Swedish competitor Ericsson, which similarly had said that its North American business was facing low sales as carriers continue to reduce inventory levels.

Nokia is banking on operators not wanting to fall behind their rivals in expanding 5G coverage.

“There's strong competition between operators. If one operator slows down for a longer period of time, they will lose competitiveness,” Lundmark said. “We believe that the competitive situation will drive their investments. When exactly