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Nokia Deepfield Analytics to Boost Telefonica Spain's Network

Zacks Equity Research

Nokia Corporation NOK recently announced that Telefónica Spain — an operating arm of Telefónica, S.A. TEF — will utilize its Deepfield Cloud Intelligence analytics solution with an aim to troubleshoot the latter’s Fusión network in real time and ensure optimal user experience.

The Finnish telecom equipment vendor’s avant-garde solution will likely equip Telefónica Spain with previously unfeasible visibility into application and service traffic on its network. Nokia Deepfield insights help network engineers rapidly adjust to changes in application demand and traffic patterns.

Markedly, the solution provides operators with the required network visibility and actionable analytics that enable them to automate operations, while improving network and service capabilities. In fact, automation of cloud and network analytics will significantly expand service assurance and performance for Internet video and pay TV customers.

The company’s Deepfield is likely to provide Telefónica with a view of each network path and the aggregated traffic running through it with Nokia’s Cloud Genome technology, which tracks more than 50,000 popular cloud applications and over-the-top services.

Nokia continues to execute its strategy with particularly notable progress in Nokia Software and expansion to select enterprise vertical markets. It aims to accelerate strategy execution, sharpen customer focus and reduce long-term costs.

Additionally, the company is expanding business into targeted, high-growth and high-margin vertical markets to address opportunities beyond its traditional markets. The rollout of next-generation 5G networks is expected to improve market conditions considerably through 2019 and beyond.

Backed by 5G ramp up, Nokia has reiterated its financial projections for 2019 and expects non-IFRS operating margin between 9% and 12%. Non-IFRS EPS is expected in the range of €0.25-€0.29.

Over the past year, shares of Nokia have lost 12.5% against the industry’s rise of 6.9% due to increased competitive pressure. Nevertheless, the company is witnessing healthy underlying momentum in its focus areas of software and enterprise, which bodes well for its licensing business.

It remains to be seen whether coveted solution offerings to industry frontrunners can help the company post a turnaround in the coming days.

Currently, Nokia has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry include Ericsson ERIC and Ubiquiti Networks, Inc. UBNT, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ericsson is currently trading with a forward P/E of 25.4X.

Ubiquiti has long-term earnings growth expectation of 19.8%.

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