Nokia exited 2022 with greater velocity than Nordic rival Ericsson, scoring significant telecommunications and 5G radio access network (RAN) sales growth on the back of robust 5G deployments in India that countered slowing 5G sales in North America. However, the vendor cut near-term expectations for its cloud-based offerings

Nokia’s sales increased 16% year over year in the fourth quarter, building on success the vendor has been posting for most of 2022.

Company management touted broad portfolio growth across Europe and “heavy growth” for its Mobile Networks division in India, CFO Marco Wirén stated. Nokia has scored significant 5G RAN deals with India operators Bharti Airtel and Reliance Jio Infocomm.

This growth has more than offset a slowdown in 5G spending by North America operators, which have stated plans to slash spending following their initial 5G deployments.

Wirén noted this change was “just like we expected because of the very front-end heavy load investments. … We expected that the [fourth quarter] would be a little bit muted, and that’s exactly what happened.”

Nokia’s positivity was in contrast to Ericsson, which reported disappointing Q4 and full-year 2022 results, further hampered by a somewhat dour outlook for the first half of 2023.

“We remain positive on the long-term outlook for our business,” Ericsson noted in its earnings release. “However, the near-term outlook … remains uncertain.”

Both vendors could be set to grab U.S. market share following the Federal Communications Commission (FCC) adopting new rules prohibiting domestic telecommunication operators from acquiring and using networking and other equipment from Huawei, ZTE, and a handful of China-based telecommunication vendors deemed to pose a security threat to the nation’s communications network.

Nokia CEO Pekka Lundmark also sprinkled in some 6G expectations, stating the vendor expects 6G technology to begin making a financial impact as soon as 2028. A handful of vendors and operators have already begun to set up 6G collaboration angled toward network deployments starting later this decade.

Lundmark also stated that Nokia was beginning to make progress toward growing its Cloud and Network Services business, reporting net sales growth for the full year. However, he also slashed gross margin expectations for that segment due to front-loaded financial investments.

The vendor had recently said it expected that segment to produce gross margins of between 8% and 11%, but is now guiding for margins between 5.5% and 8.5%.

“Part of that is because of our own decision to accelerate spending and investment in edge networks and campus wireless,” Lundmark said. “You can see that we have clear aspirations going forward to grow faster than the market and to expand to double-digit margins in the future.”

Nokia last November added a 5G Core as part of its software-as-a-service (SaaS) portfolio. That platform was the tenth to join that portfolio, and was one of its most complicated to implement.

Ed Elkin, 5G core solutions marketing executive at Nokia, explained those challenges included developing a 5G standalone (SA) core, migrating that core to work reliability and consistently in a public cloud environment, and putting it in a package that was easy to consume.