(Reuters) – Shares in Nokia <NOKIA.HE> fell up to 8% in Wednesday trade on concerns that the Finnish company was losing the business of its key client Verizon <VZ.N> in the United States.
Nokia, battling with China’s Huawei and Sweden’s Ericsson <ERICb.ST>, is trying to strengthen its 5G slate and looking especially to deployment by U.S. telecom companies for growth.
Overnight, JP Morgan downgraded Nokia to “neutral” from “overweight”, citing a potential loss of business with Verizon.
“We believe that there is a real risk Verizon will depend less on Nokia as their primary RAN (radio access network) supplier going forward,” JPM said in a note, adding there were signs Verizon was using Samsung <005930.KS>.
“Consider the JPM report on the Verizon-Nokia situation is based on some facts. So far, Verizon ran some tests with its vendor for its 5G RAN and I’ve heard that Samsung did better than Nokia,” said a Seoul-based analyst, who declined to be named.
Nokia said it continued to work with Verizon in 5G.
“Nokia is proud to serve Verizon, and we are committed to continuing to help them build the best, most reliable and highest performing network,” Nokia spokesman said.
Nokia, which axed its dividend after a profit warning last October, has been trying to rein in costs and address delays in shipments as it attempts to keep up with rivals in 5G.
Shares in Nokia were 7.4% lower at 3.71 euros in midday trading.
Samsung said it does not comment on speculation.
(Reporting by Supantha Mukherjee in Bengaluru, Heekyong Yang in Seoul and Tarmo Virki in Tallinn, editing by Louise Heavens)