The Finnish mobile telephony giant Nokia has lost an important network contract in the United States.
Cingular, the largest US mobile phone operator, announced on Wednesday that it was awarding contracts to set up its third generation network to Nokia’s competitors Ericsson, Siemens, and the US company Lucent.
The planned Cingular UMTS network will be one of the world’s largest individual network projects in the next four years.
Cingular said on Wednesday that it would place an order with Nokia for expansions for its GSM networks in 2005 and 2006. That contract is estimated to be worth hundreds of millions of dollars.
Although such a deal would be one of the biggest for Nokia this year, failing to get in on the Cingular 3G contract was a considerable disappointment for the Finnish company.
Analysts do not have a clear answer as to why Nokia failed to win the big contract.
Quality was certainly not the issue, but some say that the price may have been too high.
"The price competition has been tough. It will be interesting to see what kinds of profit margins the suppliers will get", says Jari Honko, an analyst at EQ Bank.
Ericsson was expected to do well in the competition, but the choice of Lucent came as a surprise. One possible reason could be that large companies in the United States are increasingly favouring local suppliers.
Helsingin Sanomat
2.12.2004 - TODAY
Competitors beat Nokia in major mobile network deal in United States
Competitors beat Nokia in major mobile network deal in United States