How Latin America plays out for Nokia in Finland

Latin America was the best-performing region in the world in terms of sales growth for Nokia in 2021, surpassing considerably more important revenue-generating geographies for the Finnish telecom maker, such as North America and the United States. ‘Europe.

Net sales in Latin America increased 15% last year – 17% in constant currency terms – to 1.23 billion euros ($1.39 billion) and accounted for 20% of the total company, according to Nokia’s latest earnings report.

In the fourth quarter, sales in Latin America increased more modestly by 6% and 3% in terms adjusted for currency effects to 350 million euros.

Worldwide, Nokia reported net sales of 6.41 billion euros in the fourth quarter, down 2% year-on-year and 5% in constant currency, and 22.2 billion euros. euros in 2021, up 2% and 3% respectively. Net profit stood at 1.65 billion euros against a loss of 2.52 billion the previous year.

Nokia’s performance in Latin America mirrors that of rival Ericsson, which also saw particularly strong 2021 sales in the region. Globally, Nordic companies are now neck and neck in terms of revenue, with Ericsson reporting 232 billion Swedish krona ($25.4 billion) in net sales in 2021.

Nokia’s results marked a turnaround for the company, which was losing ground to rivals Huawei and Ericsson, including in Latin America.

“Nokia enters 2022 from a strong position with improved margins, faster-than-expected strategy execution and a strong backlog, although the global supply chain situation remains tight,” said CEO Pekka Lundmark. in a press release.

Most of the company’s global growth last year came from its network infrastructure business, particularly fixed and submarine networks, while in the mobile backbone segment, the company reported growth. 5% drop in annual sales at constant exchange rates.

Nokia says its mobile networks business is in “reset” mode and an expected loss of market share has been compensated in all regions.

In its quarterly earnings call, Lundmark said the company hasn’t set a specific target for RAN market share, which it says currently stands at 26%, but that opportunities for this include Latin America.

“We did not give [said] how far we would like it to go and how fast. I would say there is potential in all markets, there are several markets around the world that haven’t even started 5G yet, Latin America is still in its infancy, India hasn’t not even started,” the CEO told analysts and investors.

“There are still lots of deals, deals to be won in many parts of the world. But I wouldn’t want to specifically highlight particular regions where the possibility of gaining margin share would be the highest.”

Nokia said it has 214 5G commercial agreements in place and 74 live 5G operator networks. The deals include those with Uruguay’s Antel, Ecuador’s CNT, Chile’s Movistar, Aruba Setar, Telecom Argentina and TIM Brasil.

TIM, however, did not confirm a 5G deal with Nokia and said it would begin rollouts with current vendors Ericsson and Huawei.

Together with Antel, Nokia activated in 2019 what the two companies claim to be the first 5G network in Latin America.

PRIVATE NETWORKS

The group reported that private cellular network projects will be a major priority for this year as private wireless commitments continue to be strong.

Nokia claims to be the market leader in this type of delivery for industries and businesses. According to the group, a good order book in the fourth quarter “expects [the] foundation for growth in 2022.”

The company also said it will seek new business models, strategic partnerships, business expansion and transition to a software as a service (SaaS) model this year.