Nokia, Nextlink Internet to Bridge Digital Gap in Rural US

Nokia Corporation NOK has partnered with Nextlink Internet to bring broadband services to people living in underserved regions in the Central United States. The companies plan to upgrade networks with the Citizens Broadband Radio Service (CBRS) spectrum and Nokia’s Airscale 4G LTE RAN.

Nextlink Internet is a provider of high-speed broadband and voice services, particularly in rural areas. It is a participant in the FCC’s Connect America Fund Phase II. The company is an investor in the recent FCC auction of CBRS airwave licenses.

Nextlink Internet will use its new spectrum to connect communities with broadband. The company will be able to provide its customers with Internet speeds of up to 100 Mbps downlink and 20 Mbps uplink in rural regions in 11 states.

Nokia’s AirScale Radio Access is a radio access solution that helps service providers to address the increasing demands for connectivity. Nextlink Internet will deploy LTE with Nokia AirScale 4G RAN to deliver higher bandwidth and support latency-sensitive applications. The companies are currently deploying up to 25 new towers a month to support subscriber growth.

Nokia is well positioned to benefit from copper and fiber deployments of passive optical networking. The company expanded its IP routing business into the data center market. The company seeks to expand its business into targeted, high-growth and high-margin vertical markets to address opportunities beyond its primary markets.

Nokia's growth strategy broadly hinges on four priorities. The first priority is to lead in high-performance networks with its communications service provider customers. The second one is expansion of network sales to select markets, specifically energy, transportation, public sector, technical extra-large enterprises and webscale players. Building a strong standalone software business is the third priority. Fourthly, it aims to create new business and licensing opportunities in the consumer ecosystem.

Nokia has reached 100 5G contracts with communications service providers, marking an important achievement in the highly competitive market. The Finland-based telecom equipment provider has an aggregate of 160 5G engagements with operators, from deals to paid trials. It currently has 36 live 5G networks, both public and private.

The company secured 17 new 5G deals in the third quarter of 2020, which underscores its progress in strengthening the mobile radio product portfolio. Nokia has been developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset. It aims to accelerate product roadmaps and cost competitiveness through additional 5G investments in 2020.

Nokia’s shares have added 17.9% in the past six months compared with 41.6% growth of the industry. The company has a long-term (three to five years) earnings growth expectation of 15.6% compared with the industry’s 15%.

Nokia carries a Zacks Rank #3 (Hold), at present.

Some better-ranked stocks in the broader industry are Corning Incorporated GLW, Ooma, Inc. OOMA and Viasat, Inc. VSAT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

Ooma delivered a trailing four-quarter positive earnings surprise of 238.9%, on average.

Viasat delivered a trailing four-quarter positive earnings surprise of 361.3%, on average.

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