Exclusive-Nokia to supply 5G radio equipment to Portugal's MEO, sources say

By Abhinav Parmar and Supantha Mukherjee

(Reuters) - Nokia is set to win a contract to supply 5G radio equipment to Portuguese telecoms operator MEO, according to an internal Nokia blog post and two sources familiar with the matter.

Nokia is set to secure the deal even though China’s Huawei has been MEO’s sole supplier of 2G, 3G and 4G Radio Access Network (RAN) equipment.

The contract has been agreed upon but not yet signed, and an announcement is likely to come as early as next month, according to the sources.

MEO is one of Portugal’s leading mobile operators formerly known as Telecom Portugal and now owned by France’s Altice.

"In recent years, MEO ... has been supplied in RAN only by Huawei. In other words, Huawei has had a 100% market share in 2G/3G/4G. We have now been selected to replace Huawei in some of the key markets in Portugal," Tommi Uitto, president of Nokia’s mobile networks, wrote in an internal blog seen by Reuters.

A Nokia spokesperson declined to comment, as did Huawei. MEO did not immediately respond to a request for comment.

RAN equipment has generated the bulk of telecom sales for the likes of Huawei, Nokia and its Swedish rival Ericsson but a fall in demand for new equipment from telcos since last year has hit Nokia and Ericsson, prompting them to cut thousands of jobs.

The global RAN market is expected to decline 5-8% in 2024, according to research firm Dell’Oro.

Huawei, which was banned in the U.S. and several European countries over security concerns, still has some presence in Europe and a major share in the fast-growing telecom market in China.

The deal would mark Nokia’s return to Portugal’s RAN market after it lost market share there to Huawei many years ago and has not supplied any communications service providers with RAN in the country since then, Uitto wrote in the internal blog seen by Reuters.

(Reporting by Abhinav Parmar and Supantha Mukherjee; Additional reporting by Olivier Sorgho; Editing by Susan Fenton)