Thursday, April 18, 2024

Nokia's Q1 sales drop 19% yoy as mobile operators reduce spending

Nokia reported Q1 2024 sales of EUR 4.667 billion, a drop of 19% yoy in constant currency (-20% reported). Q1 comparable diluted EPS amounted to EUR 0.09; reported diluted EPS of EUR 0.08.


Mobile Networks Division

The Mobile Networks division faced significant challenges in the first quarter, with net sales falling by 37% in constant currency, primarily due to reduced spending in North America and India. The slowdown in India was anticipated following the rapid deployment of 5G in the first half of 2023, and the outlook for the region remains unchanged for the full year. However, the division experienced a robust gross margin of 42%, a notable improvement from 34% in the previous year. This improvement was partly due to a favorable shift in regional and product mix and partly due to exceptionally low indirect costs of sales. The division expects the first quarter to be the lowest point in demand, with activities expected to pick up progressively through the rest of 2024.

Network Infrastructure Division

The Network Infrastructure division of Nokia has shown promising signs of recovery, continuing the momentum of improved order intake from the end of the previous year into the first quarter. This uptick in orders contributed to year-on-year growth and an increased backlog. Specifically, the Fixed Networks segment has a positive outlook for 2024, often being an early indicator of market recovery. Conversely, the Optical Networks segment may experience a slower recovery. Despite broader economic challenges, the division is optimistic about returning to net sales growth in 2024, particularly with a stronger performance expected in the second half of the year.

Nokia Technologies Division

Nokia Technologies had an exceptionally strong start to the year, underscored by several significant patent licensing agreements. These deals boosted the division's annual licensing net sales run-rate from between EUR 0.9 to 1.0 billion in the fourth quarter of the previous year to approximately EUR 1.3 billion in the first quarter. The division also recorded over EUR 400 million in catch-up net sales during this period. With the smartphone licensing renewal cycle now complete and no major renewals on the horizon for several years, Nokia Technologies is poised for a period of stability. Looking forward, the division plans to focus its efforts on expanding into new growth areas, aiming to elevate its annual licensing net sales run-rate to between EUR 1.4 to 1.5 billion in the mid-term.

Cloud and Network Services Division

The Cloud and Network Services division began the year slowly, impacted by the challenging spending environment. Nevertheless, the division is witnessing improving order intake and momentum in its pipeline. A significant development has been progress with the Network as Code platform, which enables operators to monetize their 5G investments by offering developers advanced API access to the network. This platform has already attracted 11 operators, with many more in active discussions, promising new revenue streams and strategic growth in the future.

"We have been executing quickly on the operating model changes we announced back in October along with our cost savings roadmap. These actions, combined with our expectation for improved net sales growth in the second half of the year, supported by our order backlog, mean we are solidly on track to achieve our full year comparable operating profit outlook of EUR 2.3 to 2.9 billion and free cash flow conversion of 30% to 60%," stated Nokia CEO Pekka Lundmark.


Napatech expands IPU Portfolio with 400GbE powered by Altera and Intel

Napatech disclosed the expansion of their IPU product line to include 400 GbE solutions based on the latest generation of technology from Intel and Altera.

In 2023, Napatech developed the F2070X product line of production-grade hardware with turnkey software that delivers a 200 Gbps SmartNIC or IPU for a variety of top applications, services, and use cases. The products are based on Altera’s industry-leading IPU Platform F2000X-PL, anchored by the successful joint effort that delivered F2070X solutions optimized for leading data center use cases that include network, storage, and security offload and acceleration. Strong customer demand and early design-win success have resulted in initial orders for the F2070X, speaking to the value of Napatech’s turnkey solutions.

The next stage of the collaboration is a logical continuation, scaling the platform by 2X in throughput and the option for the 400 Gbps IPU, defined by Altera’s Hot Springs Canyon architecture. It is packed with the latest technology from Intel and Altera, including the Intel Xeon D processor and Agilex 7 I-Series FPGA. The products also feature an innovative, disaggregated design that unlocks new network architectures, applications, and services. It allows deployment as a SmartNIC that can be expanded to IPU configurations with an optional processor. The disaggregation also provides flexible combinations of FPGA and processor resources that deliver customers the optimal mix of functionality, performance, size, cost, and power while supported in standard, high-volume servers from leading OEMs.

The new SmartNIC and IPU solutions, based on the Hot Springs Canyon architecture, are designed for the highest volume and growth segments for programmable NICs. These include modern cloud and edge computing applications and services, AI infrastructure, disaggregated storage, hybrid multi-cloud enterprise business applications such as data analytics and cybersecurity, and other high-volume, distributed use cases. 

Altera and Napatech collaborated on the detailed specifications of the Hot Springs Canyon architecture and initial product designs in partnership with a tier-1, global server OEM that continues to lead in enterprise and cloud data centers. Consequently, this next phase of the partnership again includes significant contributions by all parties reflecting the shared commitment to bringing this differentiated solution to the market.

“Through generations of innovation, Altera and Intel have earned the trust and confidence of cloud, enterprise, and telecom data center operators,” said Jarrod Siket, chief marketing officer at Napatech. “Napatech continues to benefit from their product and technology leadership, as well as sales, marketing, and business development strengths, that help to unlock Napatech’s strategic value for our customers and shareholders.”

“Together with Napatech, we extend the success of Altera’s 3rd generation IPU platform from a majority of the global hyperscale, next wave and AI specialty cloud service providers into the wider public, private, and on-premise data center markets for cloud and enterprise market segments,” said Jim Dworkin, Vice President and General Manager of the Cloud & Enterprise Acceleration Division at Altera. “We are pleased to see Napatech continuing to expand its IPU and SmartNIC portfolio with market-leading hardware and software providing customers with best-in-class, turnkey data center networking, storage, security, and telemetry solutions based on Altera technology.”


Paratus powers Johannesburg-to-Lisbon route with Infinera

Paratus Group, a prominent network provider in Africa, has implemented Infinera's GX Series and FlexILS solutions to establish the express route with the lowest latency between Johannesburg and Lisbon. This route achieves a latency of 123 milliseconds and can support wavelengths up to 800G.

The deployment utilized Infinera's technology on Paratus Group's newly finished 1,890-km express fiber link. This route stretches from Johannesburg to Europe, passing through Botswana to Swakopmund. There, it connects with the Equiano subsea cable that extends from Namibia to Lisbon, and continues to London and other European destinations.

Paratus is the landing partner for the Equiano subsea cable, which offers diverse routing and geographically separated paths. Deploying Infinera’s solutions mitigates possible cable station faults and ensures the network remains intact and fully functional around the clock.

“As a steadfast partner on the ground in Africa, Paratus offers unrivalled wholesale capacity solutions for network operators, as exemplified by our advanced technology from Infinera, our infrastructure, and our commitment to offering redundancy,” said Martin Cox, Paratus Group Chief Commercial Officer.

“Our continual investment in creating Africa’s quality network is now extended with the live launch of this superhighway powered by Infinera’s industry-leading technology. This is an exciting time for network operators in South Africa because they can now enjoy the fastest and most robust connectivity from Africa to Europe,” said CEO of Paratus Group, Schalk Erasmus.

“Deploying Infinera’s GX networking solution enables Paratus to leverage the industry’s highest-capacity solution to offer its customers high-performance services while minimizing latency and maximizing reliability,” said Nick Walden, Senior Vice President, Worldwide Sales, Infinera. “We are pleased to work with Paratus to launch these new services to the region.”

Carrier looks to direct-to-chip liquid cooling opportunities

Carrier Ventures  investment and technology partnership with Strategic Thermal Labs, an Austin-area heat transfer research and development company with industry renowned expertise in data center liquid cooling. 

Carrier plans to leverage STL's groundbreaking technology for a liquid cooling solution for data centers. As part of the financial investment, Carrier will receive a board seat in STL, along with exclusivity for a highly differentiated solution.

"Direct-to-chip liquid cooling is significantly more efficient than traditional cooling methods and critical to data centers of the future as AI and other technologies continue to fuel the global demand for high-density computing," said Ajay Agrawal, Senior Vice President, Global Services, Business Development & Chief Strategy Officer, Carrier. "Together with STL, we will help to significantly reduce data center energy consumption, while also providing customers with a highly scalable solution."

"Data center power consumption is surging at unprecedented rates with a significant portion of that power increase belonging to inefficient cooling technology," said Austin Shelnutt, President, STL. "The world needs highly innovative cooling solutions that can enable the next generation of computer infrastructure while using far less energy in the process. Coupling the legacy of Carrier's energy efficient infrastructure solutions with STL's unique depth and breadth of expertise in data center cooling is highly synergistic. We believe this partnership will be incredibly powerful in the fight to mitigate global energy consumption."

The investment in STL follows Carrier's acquisition of leading data center infrastructure management (DCIM) provider Nlyte in 2021. Carrier's Nlyte DCIM tools share detailed information between HVAC equipment, power systems and servers/workloads that run within data centers, providing unprecedented transparency and control of the infrastructure for improved uptime.

Vodafone Business appoints Marika Auramo as CEO

Marika Auramo has been appointed CEO of Vodafone Business, with effect from 1 July 2024.

She joins from SAP, the global enterprise company, where she was Chief Business Officer for the EMEA region. In this role, Marika was responsible for driving the go-to-market strategy for SAP’s product portfolio across 89 countries and for managing 14,000 employees. Marika joined SAP in 1999 and has held a diverse set of leadership roles since then, including COO EMEA North, Managing Director for the Nordic and Baltic region, Global COO of SAP Database and Data Management in the US, and Interim President of the EMEA region.

Margherita Della Valle, CEO of Vodafone Group, said: “I am delighted that Marika will be joining Vodafone to lead our Business division, a key growth driver. She brings extensive B2B experience from the IT industry, and I look forward to welcoming her as a member of our Executive Committee.”

Marika Auramo said: “I am looking forward to working with Margherita and the management team and to engaging with Vodafone’s customers and partners. Vodafone Business has strong growth opportunities ahead – as large corporates, SMEs and the public sector look to adopt more digital tools to enhance growth and productivity – and I will be working alongside my new colleagues to capture this.”

Marika will take over from Giorgio Migliarina, who has successfully led Vodafone Business as interim CEO. Vodafone Business reported service revenue growth of 5% at the Group’s third quarter trading update. Vodafone Business is growing across all segments due to strong public sector demand and increasing customer adoption of new digital services, such as Cloud, Security and IoT.

Korea's KISTI deploys 600G Research Network with Ciena

The Korea Institute of Science and Technology Information (KISTI) has successfully launched the first 600G nationwide research network in South Korea using Ciena’s 6500 powered by WaveLogic 5 Extreme (WL5e) programmable 800Gb/s coherent technology.

The network is believed to be the first research network to provide long distance 600G capabilities in Asia.

“With the recent increase in data-intensive science based on petascale or exascale data, many of the research tasks performed by our member institutions are driven by large-scale big data. Therefore, we have built KREONET, a high-speed national science and research network between member institutions. This collaborative research environment enables cutting-edge scientific and technological research and requires a high-speed network,” explained BuSeung Cho, director of KISTI’s KREONET Center. “The 600G research network can support the capacity and high bandwidth demands required by domestic and foreign member institutions.”

“South Korea is a leader in digital innovation, being the world’s first country to launch commercial 5G service for example, and much of this progress is a result of the priority South Korea places on research and development. To help these researchers further innovate and collaborate better with their peers, KISTI is leveraging Ciena’s WaveLogic coherent technology to empower its advanced network infrastructure,” said Henry Kim, President, Ciena North Asia.

Windstream extends fiber to Georgia data centers

Windstream Wholesale has expanded its fiber network to two prominent data centers, Ascent and Stack, located in Alpharetta, Georgia. 

By seamlessly integrating its operations into the Ascent data center located at 4905 North Point Parkway and the Stack Data center located at 3200 Webb Bridge Road, both in Alpharetta, Windstream Wholesale has effectively tailored its services to meet the requirements of this valued customer. This network expansion not only highlights Windstream Wholesale’s flexibility but also positions the company to offer diversity advantages to future customers in the thriving Atlanta market.

To secure the initial customer deal, Windstream Wholesale proposed innovative route designs tailored to the specific requirements of the data center locations. This proactive approach, combined with close customer collaboration, ensured the successful implementation of the customer's connectivity solution.

“We invested the necessary time to work with the customer, actively listening to their needs and delivering the optimal routing solution,” said John Nishimoto, senior vice president of product, strategy and marketing at Windstream Wholesale. “Our initial deal facilitated the customer’s success and enabled us to bring these new data centers on-net. Leveraging different paths for the two routes enhances the value proposition and positions Windstream Wholesale as a one-stop-shop for diverse multi-vendor route solutions.”