HELSINKI -- Nokia on Tuesday moved closer to challenging Ericsson as the No. 1 supplier of so-called 3G, or third generation, mobile networks with a $300 million deal with Singapore operator StarHub.
Included in the deal will be 3G core and radio access network equipment. This equipment aims to give cellphone users access to non-stop Internet, video conferencing, fast data transfers and other multimedia thrills.
Nokia of Finland is going toe to toe with Sweden's Ericsson, the world's leading mobile infrastructure maker, to win the most 3G orders. That market is expected to take off this year and next as mobile phone operators spend big bucks to upgrade their networks.
"As there are so few contracts on the market, each 3G contract is very important and is heavily fought over," said Swedbank tech analyst Jan Ihrfelt. "It's a very important indication of who the attractive 3G manufacturers are."
Operators are battling each other to win 3G licences under auction, often at a high cost. The licences are seen as lucrative as subscribers increasingly turn to mobile services.
Earlier this month, five phone companies, including Vodafone AirTouch, paid a total of $33.32 billion to each operate a 3G licence in Britain.
Nokia, the world's leading cellphone maker, said it expected the number of 3G licences awarded this year and next to soar, leading to greater competition among network makers.
"Over the next 18 months we see 80-90 (3G) licences in Europe, but it's really next year that things will take off," said Arja Suominen, a Nokia spokeswoman.
Nokia shares were 5 percent higher at 52.84 euros on a positive midday bourse, clawing back from a loss of 11 percent on Monday as tech and telecom shares worldwide were battered.
Winning the Singapore order has moved Nokia closer to challenging Ericsson's leadership position in 3G, but Nokia said it was still too early in the race to talk about market share.
Suominen said Nokia had won four 3G orders in four countries -- Japan, Singapore, Finland, and Liechtenstein. Ericsson has won five orders coming from Britain, Finland, and Japan.
Nokia admits it is the No. 2 player in 3G, but says it aims to be a significant player in the fast-growing market. It also sees other players, such as Germany's Siemens and France's Alcatel, becoming competitors.
Analysts still see the race for leadership in the mobile infrastructure business as a dogfight between Ericsson and Nokia, although most say Ericsson is winning the biggest orders worth the most money from the operators.
But some worry that given the expected high prices to be paid for each 3G licence -- especially after the successful British auction -- operators may be forced to scale down the size of orders for 3G equipment, hitting network equipment producers.
