Nokia Corporation’s (NOK) network unit – Nokia Solutions and Networks (:NSN) – has reportedly cut a deal with Vodafone Group Public Limited Company’s (VOD) New Zealand operations to install a 700 MHz based LTE network. However, financial terms of the deal have been kept under wraps.
Per the deal, NSN will deliver its Single RAN-Advanced (radio access network) technology on its Flexi Multiradio 10 Base Station to network sites along with the modern 6-pipe RF module for APT 700 MHz to send Multiple Input and Multiple Output, which has the capacity to support up to 3 sectors with the help of a single unit.
In the past few months, the company has inked several contracts. In May, NSN sealed a five-year deal with Telenor – a multinational telecommunications company – to provide the latter with radio access equipment and accomplished services. Per the deal, NSN will help Telenor in upgrading its 2G, 3G and 4G networks across Europe and Asia.
In the second quarter, Nokia’s NSN segment generated $3,519 million in revenues, down 7.7% year over year. However, we believe regular contract wins as above will help the company improve revenues.
More recently, in July, Nokia announced its plans to buy SAC Wireless – a U.S. based network installation services provider. Nokia believes that post acquisition, problems plaguing the company like site procurement, and applying for certifications and sub-contracting, among others, will be resolved. The company is expecting to finalize this deal in the third quarter of 2014. We believe the acquisition of SAC Wireless will not only help Nokia enhance its product portfolio but also lead the company to win further orders.
Nokia currently bears a Zacks Rank #3 (Hold).
Other Stocks to Consider
Better-ranked stocks worth considering in this sector include DragonWave Inc. (DRWI) and Ericsson (ERIC). Both the stocks hold a Zacks Rank #2 (Buy).