Nokia signs €1.36b cloud, network technology deal with China Mobile

Nokia will provide China Mobile with cloud and telecommunications technology services under a new €1.36 billion deal for 2016.

Nokia and China Mobile have announced signing a one-year €1.36 billion (9.927 billion yuan) "frame agreement" for Nokia to provide China's largest telecommunications carrier with cloud services; mobile, fixed, IP routing, optical transport, and customer experience management technology; as well as operational support and global services during 2016.

The agreement, signed by executive vice president of Nokia Hans-Jürgen Bill and executive vice president of China Mobile Li Huidi at the Sino-German Economic Forum, will also see China Mobile be the first to deploy the Nokia AirScale Base Station.

The AirScale Base Station enables the simultaneous operation of several radio technologies in one base station, allowing for "virtually unlimited" scalability, which is of increasing importance as 5G is developed and demand grows for Internet of Things (IoT) connectivity, according to Nokia.

"This is a highly significant agreement with our longstanding partner; it strengthens Nokia's position as a leading provider of next-generation technologies in China, and reflects our larger footprint in the country following the acquisition of Alcatel-Lucent," said Mike Wang, president of the joint management team of Nokia Networks China and ASB.

"We are committed to delivering mobile broadband capabilities that will allow operators to optimise their networks and open up new opportunities for them and their subscribers."

Nokia has collaborated with China Mobile on various projects and partnerships for more than 20 years, with their first agreement to support China Mobile's first GSM call in 1994.

Nokia last month announced a loss of €613 million for the first quarter of 2016 after its €15.6 billion acquisition of Alcatel-Lucent with an EBITDA loss of €304 million.

Net sales for Nokia Networks included €572 million in Greater China, which was down by 5 percent from the €604 million reported during the same quarter a year earlier.

As of the end of Q1 2015, China Mobile became the world's largest mobile provider, with 633 million devices subscribed to its services and a surge in its data business of 22.3 percent, to 253.1 billion yuan year on year for the quarter. Its overall profit dropped by 10 percent to 109.3 billion yuan due to its significant investment in network development.

China has been tipped by Ericsson to add 210 million new mobile subscriptions over the next four years to 2020, with users getting through 20 exabytes per month in total by 2021 as 5G arrives and IoT uptake picks up.