Nokia and Kongsberg's 5G Defense Pact: A Strategic Inflection Point in Secure Communications

The convergence of 5G technology and defense applications is reshaping the landscape of secure communications, and Nokia's partnership with Kongsberg Defence & Aerospace stands at the forefront of this transformation. As global demand for resilient, low-latency networks surges, the collaboration between these two industry leaders is not merely a strategic alliance but a catalyst for redefining modern warfare and national security infrastructure.

A Market on the Cusp of Disruption

The 5G defense market is expanding at an unprecedented pace. According to a report by SkyQuest, the market size was valued at USD 3.2 billion in 2023 and is projected to reach USD 4.2 billion by 2032, growing at a compound annual growth rate (CAGR) of 17.3% 5G Defense Market Size, Growth & Trends Report | 2032^[1]. Another analysis from The Business Research Company forecasts an even steeper trajectory, with the market expected to balloon from USD 3.1 billion in 2024 to USD 10.5 billion by 2033, reflecting a CAGR of 14.6% 5G in Defense Market Size, Growth, Scope, & Forecast ...^[2]. This exponential growth is driven by the integration of 5G into autonomous systems, IoT-enabled battlefield analytics, and AI-driven decision-making frameworks.

Nokia's recent Q2 2025 financial report underscores its pivotal role in this evolution. The company reported a 14% year-over-year growth in its Cloud and Network Services segment, fueled by momentum in 5G Core deployments Nokia Corporation Report for Q2 and Half Year 2025^[3]. This positions Nokia as a critical enabler of next-generation defense networks, particularly through its collaboration with Kongsberg, which specializes in advanced military hardware and software solutions.

Strategic Innovations: From Slicing to Sovereignty

The partnership's technological focus is exemplified by a groundbreaking trial involving Telia Finland, Nokia, and the Finnish Defence Forces. In a demonstration of 5G standalone (SA) slicing, an armored vehicle was remotely operated over a distance of nearly 100 kilometers, showcasing the technology's potential for secure, real-time control of unmanned systems Telia uses 5G slicing to drive armoured vehicle^[4]. This trial, part of the eAlliance initiative—a consortium of over 30 defense and tech firms—highlights the shift toward autonomous reconnaissance and combat operations.

Kongsberg's expertise in defense systems complements Nokia's 5G infrastructure. The company recently secured a significant contract to supply Bare Circuit Boards for the U.S. Army's M153 CROWS Family, illustrating its established footprint in defense electronics Kongsberg Defense and Aerospace (Prime Contractor), Bare Circuit Board for the M153 CROWS Family^[5]. Meanwhile, Kongsberg's Q2 2025 financial results reveal a 5% year-on-year increase in orders, with 54% of its total revenue stemming from the Defense & Aerospace division Kongsberg expands defence production amid surge in European military orders^[6]. This financial strength, coupled with plans to expand U.S. production capacity and invest 3-5% of sales into supply chain development, reinforces its credibility as a long-term partner.

Cross-Border Capabilities and Geopolitical Resilience

A critical differentiator in the Nokia-Kongsberg collaboration is the emphasis on cross-border interoperability. A recent 5G SA slice handover trial across three countries demonstrated the ability to maintain secure data connections in coalition operations—a vital capability for NATO and other multilateral defense alliances THE ROLE OF 5G^[7]. This aligns with broader geopolitical trends, as nations prioritize sovereign 5G ecosystems to mitigate risks from foreign technology dependencies.

Nokia's leadership has explicitly tied 5G to national security, framing it as a cornerstone of the AI supercycle Nokia Corporation Report for Q2 and Half Year 2025^[3]. The company's strategic partnerships, including its MoU with Kongsberg to develop tactical communication solutions, underscore its commitment to securing a dominant position in this high-stakes arena.

Financial and Market Validation

The financial implications of this partnership are equally compelling. With the 5G defense market expected to grow from USD 0.36 billion in 2024 to USD 0.61 billion in 2025—a CAGR of 67.5% Global 5G In Defense Market Report 2025^[8]—early movers like Nokia and Kongsberg are poised to capture significant market share. Kongsberg's recent order intake of 18.18 billion Norwegian crowns in Q2 2025, driven by defense contracts, further validates the sector's scalability Kongsberg expands defence production amid surge in European military orders^[6].

Conclusion: A High-Conviction Investment

Nokia and Kongsberg's 5G defense collaboration is more than a technological milestone—it is a strategic inflection point in the evolution of secure communications. By leveraging Nokia's 5G infrastructure and Kongsberg's defense expertise, the partnership addresses the urgent need for resilient, interoperable networks in an era of geopolitical uncertainty. With robust financials, a clear technological edge, and alignment with multi-decade growth trends, this alliance represents a high-conviction investment opportunity for those seeking to capitalize on the next frontier of digital warfare.