Nokia and Kyndryl are extending and expanding their year-long partnership that has been focused on private 5G and LTE deployments. The expansion comes as broader private network adoption continues to underwhelm.

Paul Savill, global practice leader for network and edge at Kyndryl, explained the three-year extension builds on what both firms said was a fruitful initial 12 months. This includes an anchor tenant with Dow Chemicals on a private network deployment and more than “100 active engagements across 24 countries for private wireless deployments,” Savill said.

“We both decided to invest in some resources into this together to take this program around the world and start helping our customers learn how to take advantage of it,” Savill said. “Basically, over the last 12 months we've seen tremendous traction in this space.”

Savill added that around 90% of those engagements have been from the industrial sector.

As part of the expansion, Kyndryl also gained “advanced accreditation status” into Nokia’s Digital Automation Cloud (DAC). This signifies a deeper training level and tighter integration for Kyndryl employees into Nokia’s products.

Nokia’s DAC addresses private wireless connectivity and operational technology needs in industrial sectors such as manufacturing, logistics, ports, airports, utilities, mining, and agriculture. The vendor last week added its private 5G platform to its lab-as-a-service allowing device vendors and enterprises to test interconnectivity on top of Nokia’s DAC and modular private wireless networks.

Kyndryl and Nokia are also partnering with Palo Alto Networks to launch a joint lab in Raleigh, North Carolina, to integrate a multi-factor, zero-trust security model into the private wireless package. Savill explained this will allow for the pair to certify some of Palo Alto Networks’ security platforms into the joint offering.

“We have customers that have an interest in Palo Alto technology and using their firewalls as we work it into the integrated solutions that connect the [MX Industrial Edge] compute that Nokia has got and the private wireless technology Nokia's got as they interface it with their LAN environments and their WAN environments,” Savill said. “What we're doing there with Palo Alto is working with them to certify their virtualized firewall on the Nokia platform, and all three of us are teaming up to make that happen.”

Kyndryl’s initial deal with Nokia last year marked a significant step for Kyndryl in establishing its own footing following its spinoff from former parent company IBM. That move saw IBM package its lagging Managed Infrastructure Services and Global Technology Services business units into what became Kyndryl, while IBM re-focused its efforts on its hybrid-cloud business.

Kyndryl, thus freed from its IBM cloud links, subsequently inked cloud deals with Microsoft, VMware, and Google Cloud in the span of a month in late 2021.

The latest contract extension is not exclusive, though both parties expressed a comfort level that will aid in the ongoing collaboration.

“Partnering is all about trust and commitment, mainly,” Chris Johnson, head of Nokia’s Global Enterprise Business, explained. “We're certainly committed to each other as organizations. We've got a partner program on the Nokia side that invests in enablement, and training, and marketing, and co-op funding, and go to market, and I think we're just trying to establish ourselves as a really great partner and it's working well with Kyndryl. They're certainly reciprocating that.”

The latest expansion will also see Kyndryl and Nokia develop new services for edge, cloud, IP networking, optical networking, fixed access, 5G and 4G core, and network operations software.

The expansion comes as analyst firms and operators have tempered market expectations.

Dell’Oro Group recently cut its private network forecasts, reflecting “weaker than expected progress with on-site deployments.”

“Even with revenues coming in below expectations, our long-term position remains unchanged – we still firmly believe that private wireless is a massive opportunity,” Dell’Oro Group VP Stefan Pongratz wrote in the update. “At the same time, market opportunity is not the same as a forecast and given the current progress it will clearly take some time for the private wireless market to reach its full potential. In fact, our current forecast is for private wireless to reach roughly 10% of its potential by 2027.”

Verizon CEO Hans Vestberg earlier this year lamented the slow uptake of private 5G services, which he partly attributed to network radio availability challenges that have in turn impacted service and deployment pricing options.

“We need certain radio base stations for private networks, different price ranges. We need modems for certain things. You need more than the handset and the macro sites that [are] now in there,” Vestberg said at Citi’s 2023 Communications, Media, and Entertainment Conference. “We would now have offerings for cheaper private 5G networks with certain suppliers and more high level, high quality. We didn’t have this optionality, and that’s why we’re now sort of seeing that we’re actually meeting the customer demands of building private 5G networks.”

Vestberg added that the carrier now has “the ecosystem for radios, so we are fully committed. We strongly believe in private 5G networks, and that’s a revenue stream we don’t have today because we’re not into WiFi networks and optimization of a manufacturing site. We’re not into that today.”

Nokia’s Johnson said the vendor has seen a different environment, noting it has more than 560 private wireless customers around the globe.

“The knowledge of the customer has proven to be really important and Kyndryl has decades of working with industry … literally thousands of customers and building up that that knowledge and credibility in each of those customer specific businesses. There's a whole language that needs to be learned and processes and procedures and what the way things are done.” Johnson said. “The telcos, they're less experienced … they're an important partner in this ecosystem and obviously bring spectrum and customers … but I think their learning the verticalization, the vertical knowledge, is really key.”