Nokia is on the verge of winning a significant contract to provide 5G radio equipment to Portuguese telecom operator MEO, according to an internal blog post by Nokia and sources familiar with the deal. 

This development marks a notable shift as Huawei, the Chinese telecommunications giant, has been MEO’s exclusive supplier for its 2G, 3G, and 4G Radio Access Network (RAN) equipment.

Although the contract has been agreed upon, it has not yet been signed, with an official announcement anticipated as early as next month. MEO, one of Portugal’s leading mobile operators, previously known as Telecom Portugal, is currently owned by France’s Altice.

Tommi Uitto, president of Nokia’s mobile networks, revealed in an internal blog post, “In recent years, MEO … has been supplied in RAN only by Huawei. In other words, Huawei has had a 100% market share in 2G/3G/4G. We have now been selected to replace Huawei in some of the key markets in Portugal.”

The move to replace Huawei with Nokia in MEO’s network infrastructure is significant, especially considering Huawei’s market dominance. This shift also underscores the ongoing geopolitical tensions and security concerns that have affected Huawei’s operations in several regions. 

Huawei has faced bans and restrictions in the U.S. and several European countries over security concerns, although it continues to maintain a significant presence in Europe and a dominant share of China’s telecom market.

Neither Nokia nor Huawei provided official comments on the potential deal, and MEO did not immediately respond to requests for comment.

The RAN market, critical for telecom sales, has seen declining demand for new equipment from telecommunications companies since last year. 

This downturn has impacted major players like Nokia and Ericsson, leading them to cut thousands of jobs. According to research firm Dell’Oro, the global RAN market is expected to decline by 5-8% in 2024.

Despite the challenging market conditions, Nokia’s prospective contract with MEO represents a significant win, marking its reentry into Portugal’s RAN market. 

Nokia lost market share to Huawei many years ago and has not supplied RAN equipment to any communications service providers in Portugal since then.