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Nokia to Improve Liquid Technology

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Nokia Corp’s (NOK) wholly-owned subsidiary, Nokia Solutions and Networks (“NSN”), has decided to add more location-aware capabilities to its base stations.

This will be done through enhancing the company’s Liquid applications for which NSN collaborated with ChinaCache. NSN is conducting trial runs with several wireless operators to test its liquid technology. Notable among them is SK Telecom Co. Ltd. (SKM).

In July 2013, NSN entered into an agreement withcontent delivery network operator CDNetworks Co.Ltd. to accelerate the delivery of mobile content. Liquid technology is a software solution for network infrastructure that drastically reduces the need for dedicated hardware.

NSN stated that its liquid applications will change the competitive landscape of the telecom infrastructure gear market by revolutionizing the base stations.

With the massive growth of smartphones and tablets, the demand for bandwidth has increased significantly. Instead of traditional voice calls, data and video traffic are now consuming the majority of bandwidth. This has resulted in network congestion for telecom operators.

Bandwidth shortage generally occurs during rush hours and in specific locations like offices and business centers. To address this issue, telecom carriers have been installing new base stations in the congested locations, involving huge investments.

The liquid technology of NSN is a software solution that shares all network resources across all wireless and broadband networks. Therefore, carriers can now exploit their relatively underutilized base stations in the rush hours to ease network traffic congestion.

This will eliminate the need for new base stations. The liquid technology eliminates computing power units from the base stations and shares it throughout the network, which is similar to cloud computing.

Notably, Nokia decided to vend its core mobile handset and services division to Microsoft Corp. (MSFT). The deal is expected to close in the first quarter of 2014. Post the divestiture, NSN will become the company’s chief business division with approximately 90% of the total revenue.

Last year, some industry reports stated that Nokia intent to acquire Alcatel-Lucent S.A. (ALU) to strengthen its U.S. business, which the company ultimately rebuffed. Currently, Nokia carries a Zacks Rank #2 (Buy).

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