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Politics

Nokia could soon find itself in the middle of a 5G power struggle

The flailing telecommunications provider is reportedly exploring its options.

People visit the Nokia stand at the Mobile World Congress in 2019

Nokia is reportedly exploring its options.

Photo: Josep LAGO/AFP via Getty Images

For sale: Midtier telecommunications company, lightly used.

Nokia, which these days primarily sells networking equipment, is mulling its options "ranging from potential asset sales to mergers," Bloomberg reported. Nokia's 4G and 5G networking technologies could be a boon to others looking to capitalize on the fact that many countries are reevaluating their relationship with Huawei. The U.S. has outright banned the government buying equipment from the Chinese tech giant, and networks in several European countries are waiting to see how the market for 5G hardware shakes out before choosing to work with the company.

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There are many companies that could capitalize on Nokia's shortcomings — it's been struggling for profits and cut its outlook for 5G sales in 2020 amid growing competition — but who would be best suited?

Attorney General William Barr recently suggested that the U.S. should consider taking a stake in Nokia or Ericsson in a bid to keep Huawei out of U.S. infrastructure and to revitalize the country's telecom hardware industry. Earlier this month, experts told Protocol that U.S. government investment was out of the question. White House economic adviser Larry Kudlow, who has been heading up the U.S. effort to develop Huawei alternatives, seems to agree. That probably doesn't change just because Nokia suddenly finds itself available.

"The first obvious choices would be their competitors, which would be Ericsson or Samsung," Anshel Sag, a telecoms analyst at Moor Insights & Strategy, told Protocol. Unlike Nokia, Ericsson has reported banner 5G sales, lifting its guidance for the year on the back of strong demand in 2019.

Samsung has also been trumpeting its own successes in the network market, stating that its radios had been selected for Verizon and AT&T's 5G networks in the U.S. It's also working with many of the major players on its home turf, including SK Telecom and KT. (Networking remains a very small fraction of its revenue, however.)

Of American companies, Ciena is one of the few U.S. companies that has a growing market share in telecom equipment and might see an opportunity. Sag suggested American firms like Dell or Hewlett Packard Enterprise might be interested. Dell is said to be part of Kudlow's plan for American 5G.

Networking giant Cisco could be an option, given that it already develops switches telecommunications networks rely on, but that seems less likely since Cisco's CEO Chuck Robbins ruled out a move to acquire any European networking companies earlier this month. "It would be a significant increase in their commitments and be considered a big shift in their strategy," Sag said.

Then there's the elephant in the room. Huawei leads the networking industry, with one report suggesting it has around 30% market share. But it wouldn't necessarily be interested in ingesting Nokia. "They're already the market share leader," Sag said. "Their market power is already so high that any acquisitions of competitors would be seen as monopolistic."

Politics aside, it's likely that regulatory bodies might want to block the market leader from getting any more power, especially if it takes a European competitor out of the running. The European Commission declined to comment on whether it would block a potential takeover bid.

That said, the European Commission did release a "toolbox" for dealing with riskier 5G vendors back in January, not naming Chinese companies like Huawei or ZTE, but not outright banning them, either.

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"Europe has everything it takes to lead the technology race," EC Commissioner Thierry Breton said at the time. "Be it developing or deploying 5G technology — our industry is already well off the starting blocks."

Nokia declined to comment on reports of its sale, as did Ciena, Ericsson, HPE and Samsung on a potential acquisition. Cisco, Dell and Huawei weren't immediately available to comment.

Protocol | Fintech

Plaid’s COO is riding fintech’s choppy waves

He's a striking presence on the beach. If he navigates Plaid's data challenges, Eric Sager will loom large in the financial world as well.

Plaid COO Eric Sager is an avid surfer.

Photo: Plaid

Eric Sager is an avid surfer. It's a fitting passion for the No. 2 executive at Plaid, a startup that's riding fintech's rough waters — including a rogue wave on the horizon that could cause a wipeout.

As Plaid's chief operating officer, Sager has been helping the startup navigate that choppiness, from an abandoned merger with Visa to a harsh critique by the CEO of a top Wall Street bank.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

Sponsored Content

The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Politics

What the Biden administration can learn from Ajit Pai’s FCC

The Biden administration's goals for internet infrastructure would be best pursued using economic incentives rather than heavy-handed directives, argues Douglas Holtz-Eakin.

FCC chairman Ajit Pai gave the private sector plenty of latitude. Will that continue under the Biden administration after Pai steps down?

Photo: Chip Somodevilla/Getty Images

As Federal Communications Commission Chairman Ajit Pai prepares to step down on Jan. 20, there are more than a few lessons the incoming Biden administration could learn from his tenure at the agency. Perhaps the most important lesson is that each of the new administration's goals for internet infrastructure — bridging the digital divide, universal broadband, rapid deployment of 5G — is best pursued using a regulatory approach that emphasizes economic incentives over heavy-handed directives.

Since March 1, internet usage has increased by roughly 30%, yet our networks have not buckled under pandemic-era pressures. Unlike much of Europe, we have not seen our access or speeds limited. This level of resilience is no accident. Under Pai, the private sector has had the appropriate incentives and latitude to do what it does best: invest in opportunity and innovate. The regulatory strategy and decisions got us to where we are today.

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Douglas Holtz-Eakin
Douglas Holtz-Eakin (@djheakin) is president of the American Action Forum and former director of the Congressional Budget Office.
Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Power

Quibi’s failure is a bad omen for T-Mobile’s video plans

The mobile carrier once heralded Quibi as "the next big thing" — and hasn't had much luck with other video initiatives, either.

Better days: T-Mobile CEO Mike Sievert joined Quibi CEO Meg Whitman on stage at CES this year.

Photo: Janko Roettgers/Protocol

Quibi's shutdown announcement this week has been widely panned as the inevitable end of a service that never made much sense to begin with, much less during the pandemic. However, the company's demise is also a notable failure for T-Mobile, which was one of Quibi's biggest boosters, and even footed the bill for some of its customers as part of a "Quibi on Us" promotion.

"Quibi has been a strong partner with a unique mobile-first vision, and we're sorry to hear they will be winding down operations," a spokesperson told Protocol on Thursday. "Obviously, we will continue to monitor and ensure our customers with Quibi on Us are supported during this period and through any next steps needed."

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

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