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Nokia is Moving Towards 5G Development as New Policy Takes Shape

On Thursday, with higher network revenue and 5G equipment sent up as much as 16 percent, Nokia’s latest approach saw early signs of fruit. Nokia from Finland and Ericsson from Sweden won clients as telecom operator starts to deploy 5G networks and Huawei from China is faced with cuts in terms of security issues from a the number of governments.

“This year we are seeing great demand in 5G and also in what we call network infrastructure which is basically fiber connections to homes and offices,” Chief Executive Pekka Lundmark said in an interview.

After taking the top level of employment last year, Lundmark consolidated Nokia’s business, eliminated jobs and made reforms in the company’s 5G plans and share price to rebound from the product maladministration’s failings.

According to IBES‘s data from Refinitiv the quarterly sales increased by 3% to $5.08 billion ($6.16 billion), exceeding the average projections of analysts by 4.72 billion.

Infrastructure network revenues by 28% soared to 1,73 billion Euros, including optical and fixed network devices.

“These are a solid set of results and a good start to the year for Nokia,” said Richard Webb, an analyst at CCS Insight. “In particular the operating margin of 11% looks healthy and shows that the restructuring is having some positive impact.”

Nokia shares increased by 1345 GMT by 13.7 percent at 4,057 Euros, up from 4,1435 Euros after trading.

“We expect our typical quarterly earnings seasonality to be less pronounced in 2021,” Lundmark said.

The pandemic-induced demand for infrastructure is now spread over the year and easing the seasons, which in the previous fourth quarter has resulted in an over-extended rise. Growth will be hit by one North American customer in the second half of the year, the firm says. Last year, after Samsung abruptly landed a $6 billion settlement, Nokia lost some of the contract with Verizon.

“We are able to mitigate a lot of the impact of North American market share, but this is not something that will happen in one or two quarters,” Lundmark said on a conference call.

“This was supposed to be the bad year, but now it got off to a good start … the market clearly now believes in Nokia’s goals more than before and maybe even sees them as somewhat conservative because the Q1 was so strong,” said OP Markets analyst Kimmo Stenvall.