Last year was an interesting one for Nokia and its China-based operations. September saw CEO Justin Hotard admit that Nokia’s share in the Chinese market had fallen below 3%, leading him to question why Chinese vendors were free to operate in parts of Europe when the favor wasn’t returned. By year's end, the European giant had bought out its remaining shares in Chinese joint venture Nokia Shanghai Bell (NSB), giving it a wholly Western-owned stake in China's telecom market.

This wasn’t entirely a surprise: Nokia promised it would do so in its annual report from 2024, saying the deal would allow it to simplify its ownership structure in the nation, and that it remained “committed to continue serving the local market.” Upon closure of the deal, a Nokia representative echoed the sentiment, exclusively telling this title the change allowed “Nokia to simplify its ownership structure in China.”

“The NSB organization will be incorporated into Nokia, and will fully align with Nokia’s global mode of operation. Moving forward, NSB will operate as Nokia in China, and we remain committed to serving our Chinese customers,” Nokia explained.

NSB’s actual footprint in China remains a point of contention. Dell’Oro VP RAN analyst Stefan Pongratz told SDxCentral that both Nokia and Ericsson’s radio access network (RAN) footprints are “negligible”, with their combined RAN revenue share in China currently around 3% in total.

Analyst John Strand put it rather more bluntly: “In the current and future geopolitical climate, this business is a ‘dead man walking.’” As such, Nokia had only two options: either buying or selling off the brand.

For Daryl Schoolar, analyst and director at Recon Analytics, Nokia’s full ownership should make it easier for it to outright sell off its Chinese operations in the future.

How much did the Bell ring for?

How much Nokia spent on NSB wasn't disclosed by the vendor. It inherited the firm in its earlier incarnation of Alcatel-Lucent Shanghai Bell (ASB) during the €15.6 billion ($16.6 billion) Alcatel-Lucent buyout from 2016.

In a nod to its original name of Shanghai Bell back in the 1980s, the firm was rebranded to Nokia Shanghai Bell in a joint venture between Nokia and China Huaxin Post & Telecommunications Technology.

November of last year saw China Huaxin list its stake in the firm on the Beijing Equity Exchange for CNY4.1 billion ($587 million), according to a report from Chinese publication The Paper.

In a previous announcement by China Huaxin, the company reported a net profit of CNY 90.5 million ($12.8 million) and revenue of CNY 4.6 billion ($653 million) in the first three quarters of 2025. As of the end of September 2025, its total assets stood at CNY 11.6 billion ($1.65 billion).

For Strand, the question now is what happens next, questioning NSB’s chances in a market that has all but closed out Western suppliers like Nokia and Ericsson.

“They will find that the deadline for submitting a bid to operators in China is shorter than the time it takes to be approved by the authorities to bid for projects. China is lost land for vendors like Ericsson and Nokia,” according to the analyst.

Schoolar also didn’t believe Nokia gaining a full share of Shanghai Bell would improve its share of business with domestic Chinese network operators. In fact, he said, it might make it worse, as without China Huaxin, they no longer have a domestic partner as part of Shanghai Bell’s ownership structure.

In a more upbeat view, Schoolar noted full ownership of the firm gives Nokia full control over the R&D and management of the company.

“This should help in better aligning its China portfolio with the rest of Nokia’s global portfolio. This is important when it comes to Nokia’s international customers, that are either China-based but want to do business globally or international that want to do business in China.”

The analyst gave the example of Tencent Cloud, which is looking for optical transport solutions outside of China. Shanghai Bell also provides enterprise solutions in China, such as with Hong Kong International Airport, he added.

The geopolitical question

Besides a future sell-off, Nokia’s NSB move may be down to old-fashioned autonomy. The European giant now has the authority to make its own mark in a seemingly impenetrable market, something which may temper Hotard and company’s cage-rattling on Chinese penetration in the European market. A little bit too much of that may antagonize both the EU and China, even if the former stepped up removing contentious Huawei kit across Finland and Germany toward the end of 2025.

It was only in October that now-ex mobile president Tommi Uitto told an audience including SDxCentral that China was about to exclude Nokia over “national security reasons” of the sort used against Huawei by Europe, a move which could have forced European lawmakers to remove Nokia’s Chinese competitors in retaliation.

Regarding Uitto’s warning, Strand argued China uses the same arguments as the EU and the U.S. use, but “the big difference is that the EU and the U.S. are not totalitarian systems,” he claimed.

The analyst also understood Nokia’s pain. “The fact is that China has, for many years, reduced the opportunities for Western manufacturers in China. This means that Chinese companies have better conditions outside China than foreign companies have in China.”

But in his view, Nokia has the wrong target in its sights when it should be instead calling out its peers regarding their use of Chinese equipment.

“When you look at Europe, it is the case that the EU has adopted a 5G toolbox that only 13 out of 27 EU countries have fully or partially implemented. Major European telecom operators, including Vodafone and Deutsche Telekom (DT/T-Mobile), rely extensively on Huawei equipment.”

Strand elaborated that T-Mobile’s networks are largely Huawei-based, with 58% penetration in Germany, 100% in Greece, 50% in Croatia, 100% in Austria, 70% in Poland, and 100% in the Czech Republic. In addition, its T-Systems cloud business resells cloud solutions built and run by Huawei.

“I would argue that the EU's problem when it comes to the implementation of the EU's 5G Toolbox is not the political willingness in the different EU countries, but that a number of operators are sticking with Huawei and ZTE,” said Strand.

China and cybersecurity

So far, Nokia seems to be playing things safe with all parties. Around the same time the NSB announcement was made, Nokia updated a company page to note that it was “fully committed to complying with the China Cybersecurity Law (CSL).”

In its first major overhaul since coming into effect in 2017, amendments to the CSL came into effect on January 1 of this year, tightening up China’s cybersecurity stance with immediate and elevated penalties alongside clearer liability for organizations. Going back to Uitto’s warning, this compliance would keep Nokia from exclusion by Chinese authorities.

Associate Partner at DGA-Albright Stonebridge Group Alexis Serfaty explained that Beijing intensified its efforts to phase out European equipment following updates to the CSL that mandated operators of “critical information infrastructure” to submit potentially sensitive purchases for approval by the Cyberspace Administration of China (CAC). As a result, state telecom buyers now require bidders to disclose exhaustive information on each component of their systems, as well as the proportion of domestic content.

“Foreign firms have gone so far as to detail their China-based research and development activities to improve their chances of winning contracts,” said Serfaty.

As such, under the new laws, Nokia, for its part, should expect requests for detailed disclosures of its system components, local content, and even China-based research activities. Approval processes will likewise become less predictable, Serfaty added.

The DGA researcher predicted that in response to reduced market access overseas for Chinese equipment makers, Beijing will likely continue to impose informal restrictions on foreign vendor participation in China’s network tenders, ensuring that a sizable majority of contracts are awarded to domestic players.

“Nokia will face hurdles in this regard, just as Ericsson would and/or will.”

Serfaty also predicted that telecom policy is likely to become even more tightly integrated into national industrial and security strategies through the end of this decade.

“The U.S. government, for its part, will continue expanding its definition of critical communications infrastructure to include cloud computing, undersea cable landing stations, and satellite networks. So Nokia’s operation in China as a Western entity should be viewed in this context.”