Latin America Becomes New Battleground for 5G Contracts Following Nokia’s Agreement with Claro Argentina

By Sam Bowling | 3Q 2024 | IN-7511

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Nokia has solidified its position as a leading 5G provider in Latin America with a new contract with Claro Argentina. This deal follows recent successes in Brazil and Colombia, demonstrating Nokia's growing market presence and expertise in the region. As the sole supplier for the initial phase of Argentina's 5G rollout, Nokia will deploy advanced 5G technology across the country, focusing on major cities such as Buenos Aires and Rosario. The deployment will leverage Nokia's 5G AirScale portfolio, featuring state-of-the-art base stations, baseband units, and Massive Multiple Input, Multiple Output (mMIMO) radios, all unified under a common Single Radio Access Network (RAN) architecture. This comprehensive approach will enable Nokia to deliver improved network coverage, capacity, and operational efficiency, as well as its 5G technology being poised to revolutionize a wide range of industries, from manufacturing to oil & gas. In addition to providing equipment, Nokia will offer end-to-end services, including network planning, deployment, integration, and optimization.

This contract underscores Latin America's growing importance as a battleground for 5G deployment. The recent allocation of 5G spectrum licenses in Argentina, coupled with the impending expiration of licenses in other countries between 2023 and 2025, presents a significant opportunity for vendors like Nokia to expand their presence and capitalize on the region's digital transformation.

While Huawei has maintained a presence in Latin America, as seen most prominently in its recent contracts with TIM Brasil and Movistar Chile, Western vendors such as Nokia have experienced increasingly more success in their bids to partner with local operators. This can partly be explained by the U.S.-China tech war, with Nokia emerging as a strategic beneficiary in the Latin American market. Huawei's exclusion from international cable contracts because most of these systems either land in the United States or have funds or shareholders linked to companies or to the U.S. government, has created a unique opportunity to expand its presence and capitalize on the region's burgeoning 5G infrastructure development.

Beyond geopolitical factors, Nokia's strategic initiatives have positioned it as a highly desirable partner for operators, with the following strategies underscoring its appeal:

• Technological Innovation: Nokia's 5G technology, featuring IPAA+ and ReefShark System-on-Chip (SoC), offers a comprehensive solution for network operators seeking to deploy high-performance 5G networks. The modular IPAA+ design supports a wide range of frequencies, from 700 Megahertz (MHz) to 3.5 Gigahertz (GHz), ensuring broad coverage and high capacity, while the ReefShark SoC leverages advanced chip technology and Artificial Intelligence (AI)-driven optimization to deliver superior performance, reduce deployment costs, and enhance overall network efficiency.
• Strong Partnerships: Nokia's deep relationships with operators in the region, including being Claro's trusted partner for over 20 years covering 2G, 3G, 4G, and now 5G, ensure a tailored approach to meet their specific needs and challenges.
• End-to-End Capabilities: Nokia's end-to-end 5G solutions, encompassing RANs, core networks, transport networks, software, and services, offer operators a comprehensive and integrated approach to network deployment. This comprehensive offering not only ensures seamless interoperability between components, but also addresses concerns about perceived trust in end-to-end vendors compared to purchasing individual components. By providing a unified solution, Nokia can guarantee a higher level of quality, reliability, and security across the entire network infrastructure, ultimately simplifying the deployment and management process for operators.

ABI Research forecasts a Compound Annual Growth Rate (CAGR) of 7.5% to 2029 for South America in terms of base station revenue, highlighting how the region is a ripe market for 5G deployment. As many spectrum auctions concluded at the end of 2023, and countries seek to rapidly expand their 5G infrastructure, vendors have a significant opportunity to capitalize on this momentum. To emulate Nokia's success, they should prioritize the following initiatives:

• Market Education and Awareness: Given the diverse spectrum allocations across South American countries, vendors must actively engage in market education to inform operators about the benefits of flexible frequency solutions, such as Nokia's IPAA+ technology. This includes highlighting the importance of Active + Passive (A+P) antennas for optimizing performance across different frequency bands and emphasizing the long-term value of investing in future-proof infrastructure.
• Organize Case Studies with Operators: Vendors should collaborate with operators in South America to develop case studies that showcase the successful deployment and benefits of their 5G solutions. These case studies can highlight how vendors' technology has helped operators improve network performance, reduce costs, and enhance customer satisfaction. By sharing these success stories, vendors can build trust and credibility among potential customers and demonstrate the value of their solutions.
• Focus on Rural Connectivity: To bridge the digital divide, 5G coverage must be expanded to underserved rural areas. To facilitate this, devices should be designed to withstand harsh weather conditions, and be affordable for rural communities. This involves designing routers, modems, and antennas specifically for rural environments, using durable materials, conducting wind tunnel testing on antennas, and implementing remote monitoring and vibration/shock resistance within their equipment.