Nokia China Exit Deepens Telecom Split As Nvidia Bets On 6G AI

Some Chinese commentators warn that Nokia's exit will hurt China by causing job losses and closing off a channel for international technology collaboration that domestic firms cannot easily replace.

“Nokia's retreat from China is nothing worth celebrating,” says a Jiangsu-based columnist using the pen name“Xiaozaojun.”“The most direct impact is the loss of thousands of jobs. Once the Hangzhou research and development center shuts down, an estimated 1,600 employees will face layoffs or reassignment, and that means 1,600 families under real financial pressure.”

“Many assume Huawei and ZTE will simply absorb this talent, but both companies have also tightened their own hiring. Employees used to the pace of a foreign company like Nokia are not necessarily what Huawei and ZTE are looking for right now,” he says.“These layoffs will also drive down wages and strain suppliers farther down the industry chain.”

He says Nokia's departure will deepen industry fragmentation and leave China's supply chain more reliant on a single source. He adds that the country's manufacturing capacity and technology should remain engaged with global markets, while Chinese firms should continue expanding abroad.

“Decades of China-Europe collaboration once anchored global mobile standards, but a rising challenge from North America, sharpened by the AI wave, now risks splintering those standards,” he says.“We must think carefully about how to deal with this situation.”

Chinese state media criticized Nokia's decision to leave China and took aim at Nokia Chief Executive Justin Hotard, who said last September that the European Union should reconsider why it allows Huawei and other“high-risk vendors” into its telecom networks, even as China keeps Nokia's market share below 3%.

“Hotard's framing distorts the truth,” says Lai Jiaqi, a columnist with Guancha.“Chinese telecom carriers actually want more equipment vendors to take part, since healthy competition in the bidding process helps raise technical standards and service quality, while also securing more cost-effective products.”

“Western countries have used political means to suppress Chinese companies and hurt the feelings of the Chinese people, while Western firms hold no advantage in technology, service or price,” she says.“A decline in their China market share should come as no surprise.”

She says the Hangzhou closure has raised investor concern about Nokia's future competitiveness as the company adjusts its supply chain and relocates some research and production capacity amid geopolitical pressure.

The general public may see Nokia and Ericsson as old-fashioned companies that lost to Apple and Samsung in the smartphone battle of the 2000s. But in fact, the two firms have spent the past two decades restructuring around telecom infrastructure and have regained growth momentum.

Both companies built their global reputations on radio access network equipment, the base stations and antennas that carry mobile signals, along with internet protocol (IP) routing and optical networking gear, the same technology base they once sold widely across China.

Last September, Fierce Network, a US telecom industry publication, reported that China may label Ericsson and Nokia as untrusted vendors, a retaliatory step that would mirror the West's own restrictions on Huawei and ZTE.

John Strand, president of Strand Consult, was quoted in the report saying that China branding Nokia or Ericsson as“untrusted” could further blunt their market share in regions like Africa and Latin America, where Huawei and ZTE are already the favored vendors for telecom deployments. He added that Nokia and Ericsson already do not sell to Russia, North Korea or Iran.

Daryl Schoolar, an analyst at Recon Analytics, said that if Western vendors are locked out of China while Chinese vendors are locked out of Western countries, there would be less incentive for the two sides to work together. He said the industry could see a return to region-based standards, similar to what happened during the 3G era.

“Being labeled 'untrustworthy' would hurt Ericsson and Nokia far beyond the Chinese market,” says a Hubei-based writer.“Losing China as a revenue source would reshape their long-term strategy. While both companies may speed up moving their supply chains out of the country, a full withdrawal would be costly and complicated.”