RealTime IT News

Nokia Inks 3-Year GSM Deal in Belgium

Finnish telco giant Nokia has inked a three-year frame agreement with Belgium's Belgacom Mobile to supply of a complete radio-access and packet core network for the Proximus brand in Belgium.

The pact expands on an earlier deal between Nokia and Belgacom which began in 1996 when the mobile phone operator became Proximus's GSM supplier. Nokia is already delivering its GPRS core network to the Belgian company. Those contracts have been valued at about US$177 million.

The good news of the contract win comes as Nokia cut its sales guidance for the second half of 2002 and warned there were no signs of improvement in the battered telecommunications sector. Nokia is projecting year-over-year sales growth of approximately 10 percent, 5 percent lower than previous forecasts.

There is little doubt Nokia announced its Belgacom contract expansion to help cushion the blow expected from the gloomy earnings forecasts. It also comes just weeks after rival Motorola announced four contracts valued at US$100 million to expand and upgrade GSM networks to expand China Mobile's GSM networks in the provinces of Hubei, Yunnan and the cities of Beijing and Tianjin.

Nokia it would provide a full range of GSM radio-access network infrastructure and operational support systems equipment to Proximus, which is co-owned by Belgacom and Vodafone. GSM uses narrowband TDMA , which allows eight simultaneous calls on the same radio frequency.

It said deliveries have already started and will continue over the next three years, based on Proximus' needs.

Separately, Nokia CEO Jorma Ollila said the company was in no rush to jump into a massive acquisition deal to add to its mobile business worldwide. According to reports Ollila told a company strategy meeting it was very difficult to merge technology companies in this environment.

"I don't think there has ever been a successful merger of two companies in the hi-tech area. There's a good reason why that is. The legacy of propriety technology is very difficult to merge and the corporate culture does matter in technology companies, perhaps more than others," he said.