Nokia (NOK) to Expand A1 Telekom's 5G Footprint in Key Markets

Nokia Corporation NOK recently inked a deal with A1 Telekom Austria Group to expand the carrier’s 5G services across Bulgaria, Serbia and Slovenia while strengthening its presence in the domestic market. The multi-country deal with a single vendor like Nokia will enable A1 Telekom, the European unit of América Móvil, S.A.B. de C.V. AMX, to offer commercial 5G services across the region and work collaboratively to deploy premium digital services in the near future.

Per the deal, the telecommunications equipment manufacturer will provide 5G RAN solutions from its leading AirScale portfolio in all the three markets and 5G standalone network in Serbia and Slovenia. While the project is already under way in Bulgaria, construction work in the other two markets is expected to start soon.

By unlocking network efficiencies with common operability, software delivery and increased hardware sharing, Nokia has been able to reduce the total cost of ownership for mobile operators. The company is well positioned for the ongoing technology cycle given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale product is growing fast. The AirScale Radio Access products deliver low-latency, high-capacity mobile connectivity with low cost of ownership and can be easily upgraded through a software update, thereby reducing network complexity. Nokia has been already providing this comprehensive 5G coverage to A1 Telekom in Austria and the current contract aims to further widen the scope of this long-term partnership.  

Deploying its industry-leading software, 5G RAN and IP-Backhaul solutions for this project, Nokia will help develop a reference design and build use cases on standards-based solutions. The commercial availability of its Standalone 5G network has enabled the company to take the next big step in the evolution of the 5G ecosystem to make it more pervasive across the globe. 5G networks were until now deployed mostly in Non-Standalone mode, whereby 5G network availability was dependent on the underlying LTE network for signaling support. The Standalone 5G network eliminates this 4G dependency by enabling carriers to augment their network capabilities with a simpler architecture. Moreover, it improves network speed and simplifies mobility management with seamless access to wide 5G bands for better user experience. Nokia will deliver almost zero-touch automation capabilities to A1 Telekom in Slovenia and Serbia with its standalone core network in order to be flexible to better respond to the evolving market demands.

The company is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, Nokia is transforming the way people and things communicate and connect with each other. These include seamless transition to 5G technology, ultra broadband access, IP and Software Defined Networking, cloud applications and Internet of Things.

The company facilitates its customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation needed to support dynamic operations, reduce complexity and improve efficiency. Nokia remains focused on building a robust scalable software business and expanding it to structurally attractive enterprise adjacencies. It has inked more than 170 commercial 5G contracts across the globe. The company’s end-to-end portfolio includes products and services for every part of a network, which are helping operators to enable key 5G capabilities, such as network slicing, distributed cloud and industrial IoT. Accelerated strategy execution, sharpened customer focus and reduced long-term costs are expected to position the company as a global leader in the delivery of end-to-end 5G solutions.

The stock has gained 17.3% in the past year compared with the industry’s rally of 23.4%.

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We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the broader industry are Juniper Networks, Inc. JNPR and Qualcomm Incorporated QCOM, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Juniper has a long-term earnings growth expectation of 11.8%. It delivered an earnings surprise of 7.5%, on average, in the trailing four quarters.

Qualcomm has a long-term earnings growth expectation of 21%. It delivered an earnings surprise of 13.5%, on average, in the trailing four quarters.


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