Nokia Shares Drop Amid Competitive Concerns

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

Earl Lum, President of EJL Wireless Research, indicated 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.

Nearly a year ago, EJL Wireless Research LLC reported that Nokia was being replaced by Ericsson (BS:ERICAs) at AT&T (NYSE:T) Wireless.

Nokia is facing technical issues related to power consumption and cooling requirements for its massive MIMO (multiple-input and multiple-output) radios, which are crucial for modern wireless communications. Unlike its competitors, most of Nokia's current Osprey 64T and Habrok 64T massive MIMO units for T-Mobile USA utilize fans for cooling.

Lum stated, "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."

The issues regarding Nokia's failure to deliver solutions that T-Mobile USA desired can be traced back to 2011, according to Lum, when Nokia struggled to keep up with Ericsson. Ericsson launched its first semi-active antenna integrated radio (AIR) product, while Nokia's comparable products were either late to market or not widely utilized by T-Mobile.

Notably, T-Mobile USA has already replaced older Nokia RAN equipment with Ericsson AIR 6449 massive MIMO radios across various markets in its 2022 project Excalibur.

As a result, Nokia Corp ADR has seen its shares decline more than 7% in recent trading.