Nokia slumps after analyst predicts T-Mobile to ditch supplier

Investing.comNov 20, 2024 12:28 AM

Investing.com -- Nokia Corp ADR (NYSE:NOK) shares fell sharply Tuesday after an analyst predicted that T-Mobile US (NASDAQ:TMUS) Inc. could ditch the company for rival Ericsson for its 5G network equipment needs.

Earl Lum, President of EJL Wireless Research, suggested in a LinkedIn post that Nokia (HE:NOKIA) may be "on the losing side of its battle with its Swedish competitor" at T-Mobile USA.

Almost a year ago, EJL Wireless Research LLC broke the news on Nokia getting replaced by competitor Ericsson (BS:ERICAs) at AT&T (NYSE:T) Wireless.

Nokia's technical issues including its power consumption and cooling needs for its massive MIMO, multiple-input and multiple-output, radios - a key cog in modern wireless communications are among the key sticking points.

Unlike that of its competitors, the majority of Nokia's current Osprey 64T and Habrok 64T massive MIMO units for T-Mobile USA use fans for cooling.

"ALL of Nokia's competitors have managed to design the same massive MIMO radios with the same MIMO configuration (32T/64T), at the same RF output power, with the same IBW/OBW, and with the same weight but WITHOUT fans," he added.

"We believe there is not a single mobile operator on planet Earth that wants an active cooling solution (i.e. fans) on their 1+kW massive MIMO radios," Lum said.

Nokia's series of failures to deliver solutions that T-Mobile USA wanted, dates back to 2011, Lum said, when the company failed to keep up with rival Ericsson.

Ericsson launched its first generation semi-active antenna integrated radio, or AIR, product. But Nokia's equivalent solutions were either late to market or not widely deployed by T-Mobile

"Nokia's equivalent solutions were either late to market or not widely deployed by T-Mobile," Lum said.

The call on Nokia losing further market share to Ericsson isn't without precedence, Lum argues. T-Mobile USA replaced older Nokia RAN equipment with Ericsson AIR 6449 massive MIMO radios across several markets, for its project Excalibur in 2022.

Nokia Corp ADR was down more than 7% in recent trading.

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