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Nokia Boosts 5G mmWave Deployment With U.S. Cellular Tie-Up

Zacks Equity Research

Nokia Corporation NOK recently announced its collaboration with leading mobile network operator United States Cellular Corporation USM for the deployment of its AirScale mmWave radio products. The deployment will complement the carrier’s low-band infrastructure as well as power an advanced IoT and 5G ecosystem for its enterprise customers. The strategic partnership seems to be the call of the hour when communication service providers are shifting toward automated network operations for a revamped 5G infrastructure with superior network capacity.

Markedly, Nokia continues to focus on four strategic priorities. The first priority of the company is to lead in high-performance end-to-end networks with its CSP customers. The second priority is based on its relentless pursuit to expand network sales to select vertical markets, specifically energy, transportation, public sector, technical extra-large enterprises and webscale players. Building a strong standalone software business is the third strategic priority. The fourth pillar aims to create new business and licensing opportunities in the consumer ecosystem.

Reportedly, U.S. Cellular will capitalize on Nokia AirFrame open edge solution and Worldwide IoT Network Grid (WING) solution for a simplified and cost-effective deployment of low-latency network connectivity.

As an industry-first commercial end-to-end 5G solution, the AirScale platform is equipped with best-in-class cloud RAN capabilities that empower businesses with scalable capacity, technology flexibility and network efficiency. Nokia’s AirFrame open edge solution supports a diverse range of critical applications and processes huge data demands on a real-time basis in a scalable and distributed cloud-based architecture. The solution, equipped with 5G mmWave technology, will be deployed in the 24 GHz and 28 GHz spectrum bands of U.S. Cellular. Apart from its 5G benefits, the innovative solution also enables operators to minimize future capital expenditures and enhance profitability to maximize the value of licensed and unlicensed spectrum.

Meanwhile, Nokia’s WING solution is a managed service platform that enables operators to support enterprise customers with seamless IoT connectivity globally. Specifically designed to serve multiple customers with a single database, the ‘one-stop shop’ networking technology is equipped with a flexible pay-as-you-go pricing model, which effectively ensures economies of scale. It provides ready-to-deploy vertical IoT solutions to eliminate business complexity and accelerate operator revenues with minimized risk and capital investment. Apart from leveraging new business models, WING also offers reliable, secure and cost-effective 5G IoT services to address ultra-low latency and high-throughput data connectivity requirements of several operators as well as customers. Markedly, the 5G mmWave solution is expected to be commercially available by 2021.

Notably, Nokia is focused on developing its 5G portfolio, strengthening AirScale and further advancing the capabilities of its ReefShark chipset. The company is working with multiple partners to support its ReefShark family of chipsets, which are used in many base station elements. Its end-to-end portfolio includes products and services for every part of a network, which are helping operators enable key 5G capabilities such as network slicing, distributed cloud and industrial IoT. Impressively, the latest strategic partnership is likely to strengthen the longstanding relationship between both the companies. The collaboration highlights Nokia’s efforts to enhance network strategies for a better future.

The company is well poised to benefit from expanding its business into targeted, high-growth and high-margin vertical markets to address several opportunities beyond its primary markets. However, macroeconomic dynamics and competitive pressure from arch-rivals like Ericsson ERIC and Huawei, continue to influence Nokia’s near-term performance. It is yet to be seen whether these successful deployments can provide Nokia’s network expansion efforts a significant push with an enhanced market share.

Nokia’s shares have returned 23.6% compared with the industry’s growth of 16.6% in the past three months. This Zacks Rank #2 (Buy) stock has a trailing four-quarter earnings surprise of 129.1%, on average.



Another top-ranked stock in the broader industry is Calix, Inc. CALX, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Calix’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter earnings surprise of 59.7%, on average.

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