Nokia’s US fiber optic deal draws VP Kamala Harris

Aug 06, 2023

Articles / News

Nokia struck an agreement with Wisconsin-based equipment manufacturer Sanmina to produce fiber-optic broadband network equipment targeted specifically at the United States’ recently implemented Broadband Equity, Access and Deployment (BEAD) program. That agreement included a presentation that drew local officials and U.S. Vice President Kamala Harris.

The deal calls for Nokia to partner with Sanmina to produce broadband network electronics at the manufacturer’s facility in Kenosha County, Wisconsin. That production is scheduled to begin next year and will create 200 new jobs. Nokia added that it also plans to manufacturer optical modules in the U.S., though those details remain scarce.

In total, Nokia said it plans to manufacturer optical line termination (OLT) cards for modular access nodes, a smaller OLT form factor, OLT optical modules and an “outdoor-hardened” optical network terminal (ONT).

Nokia CEO Pekka Lundmark, during a presentation at the Sanmina plant, stated this partnership would allow the vendor to quickly scale U.S. production to meet the needs of its customers, specifically noting Verizon, AT&T and TDS.

Nokia touted its leadership position in the optical networking space, which includes 70% of U.S. fiber broadband connections in North America made through its equipment.

Sanmina Chairman and CEO Jure Sola noted that his firm has been working with Nokia for more than 27 years. This includes past work on data center and cloud infrastructure.

The U.S. manufacturing plan is key to Nokia gaining a share of the $42.5 billion BEAD program, which the federal government allocated in late June. That program provides funds to all 50 states, the District of Columbia and five U.S. territories to expand broadband access, with equipment tied to that expansion required to be built in the U.S.

“When we made this investment, we knew that there would then be an increased demand for fiber optic cable and for other products that connect people to the internet,” Vice President Harris said of that program. “We knew that the demand would skyrocket. We knew companies would increase production and hire more workers.

“And whereas in the past, many of those jobs would have been created overseas, President Biden and I required that the materials and products used in these projects — from steel to electronics to fiber optic cable — must be made in America, by workers in America. We are determined to create jobs in America and keep jobs in America.”

Lundmark hinted at the deal during the vendor’s most recent earnings call, noting “new funding opportunities” for U.S.-based telecom operators that will help fund needed network investments. That comment was tied to investor concerns over a near-term slowdown in network investments.

Industry observers have noted the likely fiber-rich nature of the BEAD program.

“Fiber is clearly right in the crosshairs for the program and we’re expecting to see a preponderance of fiber networks, both from established players and from new entrants, that will be recipients of these allocations,” Dan Hays, a partner at consulting firm PwC, told SDxCentral in a recent interview.

The economics around fiber are likely to make that transport model most compelling for broadband expansion, with fiber-focused telecommunication providers having already bolstered their deployment plans. This includes both traditional fiber providers and cable companies.

“Cable is often overlooked and, in some respects, fiber has become the core of most cable networks, but we’re also seeing a significant interest from cable companies in applying for and targeting BEAD funding to expand their footprints and their reach,” Hays said. He added that “somewhere around 60% of the U.S. broadband market is served by cable and they have a good reason to want to preserve their role in all of this.”

Comcast President Michael Cavanagh told an investor conference earlier this year that his company “will be a participant in” these government funding programs.

While Nokia parsed out a carefully worded descriptor of it being the “first to announce the manufacturing of broadband network electronics products for” the BEAD program, others are primed for the opportunity.

Corning, for instance, earlier this year opened a new optical cable manufacturing plant in Hickory, North Carolina, designed to help accelerate the availability of passive optical fiber to support broadband expansion. The vendor said the expansion would add “hundreds of jobs” to Corning’s existing North Carolina workforce of more than 5,000 employees.

“Our latest manufacturing announcement is part of a series of investments by Corning in fiber and cable manufacturing totaling more than $500 million since 2020,” a Corning spokesperson explained in an email to SDxCentral. “Altogether, these investments nearly double Corning’s ability to serve the U.S. optical cable market — ensuring strong U.S. supply of optical fiber and cable to support network buildouts funded by the federal government’s [BEAD] program.”

The vendor last year also signed a long-term deal with AT&T as the basis for building a new cable manufacturing facility in Gilbert, Arizona. The two also formed a “Fiber Optic Training Program” with Corning, targeted at training 50,000 people to design, install and maintain fiber networks.

Other fiber vendor moves include CommScope expanding a production facility in Catawba, North Carolina, that will create more than 250 new jobs over the next five years, and Prysmian investing $30 million to convert its Jackson, Tennessee, copper cable facility to produce fiber optic cables.

Nokia rival Ericsson has also moved some of its equipment production to the U.S. The vendor initiated a process in mid-2018 to open a highly automated production facility in Lewisville, Texas, which opened in 2020. The facility employs more than 100 workers and has been cranking out base station equipment for operators like Verizon.