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Nokia $Nokia Oyj(NOK)$  , the Finnish telecommunications giant, is poised to make a significant breakthrough in the Portuguese telecom market. According to insiders, Nokia is set to win a contract to supply 5G radio equipment to MEO, Portugal’s leading telecom operator, which is owned by France's Altice Group.

Historically, Huawei has been the sole supplier of 2G, 3G, and 4G Radio Access Network (RAN) equipment for MEO. However, Nokia has successfully disrupted this long-standing dominance. Although the contract has not yet been formally signed, both parties have reached an agreement, with an official announcement expected as early as next month.

Tommi Uitto, President of Mobile Networks at Nokia, highlighted in an internal blog that MEO has previously relied entirely on Huawei for its RAN needs, with Huawei holding 100% of the market share. Now, Nokia has been chosen to replace Huawei in some key markets in Portugal.

Neither Nokia nor Huawei have commented on this development, and MEO has also remained silent.

The Significance of RAN Equipment

RAN equipment is a crucial revenue source for telecom equipment manufacturers like Huawei, Nokia, and Sweden’s Ericsson. However, global demand for new telecom equipment has been declining since last year. This downturn has impacted Nokia and Ericsson significantly, leading to substantial layoffs.

A Shift in Market Dynamics

The global RAN market is expected to continue its decline, with research firm Dell'Oro predicting a 5-8% decrease in market size by 2024. Despite facing bans in the United States and several European countries, Huawei maintains a strong presence in Europe and is a major player in China’s rapidly growing telecom market.

Nokia’s Resurgence

This deal is a major victory for Nokia, marking its re-entry into the Portuguese RAN market after losing its market share to Huawei years ago. Nokia has not provided RAN equipment to any Portuguese communication service providers since then.

The implications of this agreement extend beyond Portugal, potentially reshaping the 5G landscape across Europe. As 5G technology continues to mature and expand, Nokia is poised to leverage this opportunity to strengthen its leadership in the global telecom equipment market.

Conclusion

Nokia's breakthrough with MEO signifies a critical shift in the European telecom market, potentially reducing Huawei’s dominance and offering a fresh competitive edge to Nokia. This deal not only represents a strategic win for Nokia but also underscores the evolving dynamics in the global 5G race. As the telecom industry navigates through these changes, Nokia’s ability to capitalize on such opportunities will be crucial for its long-term success.