) wholly-owned subsidiary Nokia Solutions and Networks ("NSN")
has recently cut a deal with one of Israel's leading telecom
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Per the deal, NSN will supply 4GLTE equipment to Cellcom which
will also support the LTE advanced network technology. However,
the financial terms of the contract have not been disclosed.
Cellcom plans to complete the deployment of 4GLTE network
technology across its entire footprint by the end of 2014.
However, this endeavor is subject to regulatory approvals and
availability of frequency. Earlier, Cellcom had teamed up with
rival carrier Pelephone on LTE network partnership, which has
also been delayed due to regulatory issues. This is a matter of
concern for NSN as delays in 4GLTE rollout may mar the company's
business prospects in Israel.
A few months back, NSN won a major contract in Russia.
), the third largest telecom operator in Russia, selected NSN to
provide equipment and services for its 4G LTE (Long-Term
Evolution) network deployment plans. Moreover, aggressive 4GLTE
network rollout across China coupled with higher capital spending
on network upgrades in India, Korea and Indonesia may drive the
company's top line going forward.
NSN has also received a major 4G LTE network upgrade contract of
nearly $416 million from EE, a leading U.K.-based wireless
operator. The contract entails NSN to implement its Single radio
access network (RAN) Advanced solutions to allow mobile operators
to set up different network standards (radio technologies) on a
shared multi-purpose hardware.
NSN's 4GLTE equipment is widely used by carriers and popularity
wise, are positioned after
) and Huawei. In the recently concluded fourth-quarter 2013, the
NSN segment generated $4.2 billion in revenues, up 20%
sequentially. Hence, we believe that such continuous contract
wins will help the company boost its top line in the forthcoming
Notably, Nokia decided to vend its core mobile handset and
services division to
). The deal is expected to close within a couple of months. Post
the divestiture, NSN will become the company's chief business
division with approximately 90% of the total revenue.
Nokia currently carries a Zacks Rank #1 (Strong Buy).