Nokia Extends US Presence with Strategic T-Mobile Deal

2025-04-25 companies

Helsinki, Thursday, 24 April 2025.
Nokia’s new multi-year extension with T-Mobile US enhances 5G coverage, offering a bright spot amid financial challenges, and aims to strengthen nationwide connectivity with advanced RAN solutions.

Tough Financial Terrain

Nokia Corporation (NYSE: NOK) faced a challenging start to 2025 with a gloomy financial report for its first quarter. The Finnish telecommunications company reported a 1% year-over-year decline in sales to approximately €4.4 billion (US$5 billion). This was compounded by a steep drop in net profits, which plummeted to €153 million (US$174 million), down from €512 million (US$583 million) in Q1 2024 [3][4]. The results were significantly impacted by a one-time €120 million (US$137 million) settlement fee tied to a 2019 project, contributing to an operating loss in Nokia’s Mobile Networks business of €152 million (US$173 million) [5].

Strategic Extension with T-Mobile US

Amid these financial hurdles, Nokia announced a promising multi-year extension of its Radio Access Network (RAN) deal with T-Mobile US (NASDAQ: TMUS). The partnership aims to enhance T-Mobile’s already expansive 5G network, covering more than 98% of the U.S. population [1][2]. The agreement involves deploying Nokia’s AirScale RAN portfolio, notably the Habrok Massive MIMO and Levante Ultra-Performance baseband solutions, to streamline network efficiency and capabilities [6]. This strategic move aligns with T-Mobile’s ‘Challenger to Champion’ vision, as the network giant works to maintain and enhance its leadership position in the U.S. 5G race [4].

Implications for Growth and R&D

Looking forward, Nokia anticipates an operating profit impact in the range of €20 million (US$23 million) to €30 million (US$34 million) in the second quarter of 2025 due to existing tariffs. Despite the decline in Q1 results, the company is not adjusting its full-year outlook yet, awaiting clearer U.S. trade policies [5]. Notably, Nokia’s research and development spending saw an increase of 4% year-over-year to €1.1 billion (US$1.3 billion) as the company continues to emphasize strategic investments in its technology portfolio [3].

Broader Market Dynamics

The extension of the T-Mobile partnership is a significant development as it not only strengthens Nokia’s foothold in the U.S. market but also comes at a crucial time when the company is navigating recent losses from major contracts with Verizon and AT&T [5]. While the share price of Nokia fell 8% following its Q1 financial announcement, likely due to concerns over the tariff impacts, the T-Mobile deal offers a counterbalance, providing a path for gradual recovery [2]. This move is seen as both a strategic and geopolitical play, enhancing Nokia’s position within the western telecommunications landscape [4][6].

Sources

T-Mobile Nokia