Nokia has signed a deal with China Mobile in order to provide network equipment and services worth more than 1.17 billion U.S dollars. The Nokia Finland said in a statement that the company will supply products and services covering wireless and fixed network, IP routing and other related features to China Mobile for its global subscribers, and it will be provided under the one-year deal. Nokia shares closed 2.3% higher in Helsinki, their biggest daily gain in almost 4-weeks. Nokia and other equipment makers have suffered from a slump in telecom industry investment in recent years as operators completed the roll-out of 4G networks. China Mobile expects capital expenditure this year to be 22 percent lower than in 2014.
The recent agreement would bolster the position of Nokia in China as the country prepares to ramp up spending on the next generation of faster networks. The country aims to be the world leader in such so-called 5G networks, and telecom-equipment makers hope it will broaden their customer base beyond phone users to include more industrial clients. Nokia has been considered the top non-Chinese maker of telecom gear in the country, derived 11 percent of its sales last year from the greater China region, which is dominated by local players such as Huawei Technologies Co. and ZTE Corp. The latest announcement, signed at a recent Chinese-German economic forum, has echoes of previous framework agreements between the two companies in 2014, 2015, and 2016.