Nokia Unit Brings OSS Tools for Cost, Network Management
To enhance network performance as well as to bring down costs, Nokia Corporation’s (NOK) wholly owned subsidiary Nokia Solutions and Networks (“NSN”) is the first to come up with Operations Support System (:OSS) tools under the names of Nokia Performance Manager and Nokia Service Quality Manager.
While Nokia Performance Manager will help carriers efficiently supervise the performance and capacity of 2G, 3G and LTE networks, Nokia Service Quality Manager will allow telecom players to deliver real-time view of service quality across mobile broadband and IT networks.
Nokia Networks believes that the implementation of these tools will lower network management costs by nearly 19% as compared to other traditional business models. The cutting down of network expenses will be brought about by lowering installation, integration and operational costs.
Moreover, these tools are supported by Nokia Networks’ Global Delivery Centers, thus allowing carriers to select OSS services along with the maintenance and basic services like the Key Quality Indicator (:KQI) operation for Service Quality Manager or service management for a fully outsourced service operations center.
Software as a service model is quite popular in the IT industry. However, telecom carriers make huge investments to acquire such software packages. Hence, launch of the OSS software as a Managed Service for the telecom industry will create a new revenue stream for Nokia Networks.
In the second quarter of 2014, Nokia’s NSN segment generated $3.5 billion in revenues, down 7.7% year over year. This segment alone accounts for almost 90% of the company’s revenues.
Over the last few months, the NSN segment won a series of contracts and also launched a significant number of products. Recently, the company unveiled the first Network Functions Virtualization (:NFV) solution for the shipping industry.
Moreover, in the first week of September, Nokia Networks and China Telecom Corp. Ltd. (CHA) jointly launched the world’s first FDD TDD carrier aggregation that will help enhance an operator device chipset’s performance.
Hence, we believe that such service launches coupled with strategic tie-ups will certainly drive the NSN segment’s revenue growth while moving ahead.
Nokia currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Stocks worth considering in the wireless industry include BlackBerry Limited (BBRY) and Aruba Networks, Inc. (ARUN). Both carry a Zacks Rank #2 (Buy).
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