Federico Guillén has been president of Nokia’s network infrastructure business group for about five months. He’s fortunate because the business unit is having a great run. In Nokia’s most recent earnings, his group reported that net sales increased 22% year over year. The major contributors to its growth were submarine and fixed, followed by the IP routing and optical businesses.
Nokia’s CEO Pekka Lundmark has said that next generation access is a big opportunity for the company.
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Speaking with Fierce, Guillén said his group anticipates a lot more growth in fiber, largely accelerated by Covid and the work-from-home phenomenon. He said, “When all the countries started to lock down the first thing we saw was an increased amount of fiber-to-the-home.”
He said for years operators had been “squeezing the last juice” out of their networks because fiber is expensive and takes a lot of effort to lay in the ground. Also, operators typically make their fiber plans on a 7-10 year horizon. But Covid has sped up those plans, now.
Guillén said PON technology is also at an inflection point; it’s going from Gigabit Passive Optical Networks (GPON) 2.5 Gbps to 10 gig PON (XGS PON), with 25 gig PON on the horizon.
GPON is a point-to-multi-point access mechanism in which passive splitters enable one single feeding fiber to serve multiple homes and small businesses.“We are the only company with the same line card for XGS PON, and you can upgrade to 25 gig PON,” said Guillén.
Just today, Belgian operator Proximus said it achieved a world-first in collaboration with Nokia, lighting up a symmetrical 25G passive optical network in the city of Antwerp.
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In addition to fiber demand spurred by Covid, Guillén said 5G is also expanding the need for fiber to connect 5G small cells and provide backhaul. This same fiber can serve the dual purpose of also bringing fiber to neighborhoods for fixed fiber connections. For operators, this can translate into two sources of revenue.
Asked which regions Nokia is seeing the most interest in fiber, Guillén said it is in Europe, the U.S. and India. “In Europe and in the States the amount of fiber we have today is not on par with the economic power of those countries,” he said. And in India, they have “multiplied the volume dramatically,” he added.
He said Verizon’s FioS was “the first fiber-to-the-home in the world: that was done with PON.”
Fiber and fixed wireless access
In the U.S. this year there is also a big push into fixed wireless access (FWA). Both Verizon and T-Mobile are beginning to offer home broadband services via FWA – piggybacking off their mobile networks.
Guillén said FWA makes a good “complement” to fiber deployments. “Some operators are using FWA as a complement in those places where fiber is very expensive or as a stop-gap solution,” he said, “At the end, fiber is better. Fixed wireless is going to use resources of the mobile network. T-Mobile doesn’t have a fixed network, so it has to go for fixed wireless access.”
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Although Nokia’s mobile group lost some big 5G business with Verizon in 2020, Nokia still works closely with Verizon in terms of its fixed network. “Verizon remains to be one of our biggest customers on the IP, optical and fixed part,” said Guillén.