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Nokia's New Massive MIMO Solution Chosen by China Mobile

Zacks Equity Research

Recently, Nokia Corporation NOK announced that China Mobile Communications Corporation (CMCC) will deploy its new AirScale mMIMO Adaptive Antenna (MAA). The Finnish telecom equipment provider’s state-of-the-art solution has been formulated particularly for the massive bandwidth and coverage requirements of the Chinese market as it shifts to 5G technology.

Nokia continues to execute its strategy with particularly good progress in Nokia Software and expansion to select enterprise vertical markets. Currently, it has 43 commercial 5G deals with operators worldwide and is involved in more than 100 5G-related customer engagements. The company’s MAA facilitates CMCC to more efficiently allocate network resources between 4G and 5G users, while addressing the demand for high-bandwidth 5G use cases.

Markedly, the MAA uses 64 transmit and 64 receive antenna elements which jointly delivers a total of 320W output power. Nokia collaborated with CMCC to build the latest version of the MAA which at 320W is at least 80W greater than the nearest MAA available on the market.

Nokia is well positioned for the ongoing technology cycle given the strength of its end-to-end portfolio. The company’s deal win rate is encouraging with notable successes in the key 5G markets of the United States and China. Its 5G revenues are anticipated to grow sharply, particularly in the second half of 2019, driven by its commercial deal wins to date.

Its installed base of high-capacity AirScale product, which enables customers to quickly upgrade to 5G, is growing fast. The company is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them.

Leveraging cutting-edge technology, Nokia is transforming the way people and things communicate and connect with each other. These include seamless transition to 5G technology, ultra broadband access, IP and Software Defined Networking, cloud applications, and Internet of Things.

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

Shares of Nokia have lost 13.7% against the industry’s rise of 20% in the year-to-date period 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.

Nokia currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the industry include Harris Corp. HRS, Motorola Solutions, Inc. MSI and Ubiquiti Networks, Inc. UBNT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Harris has long-term earnings growth expectation of 8%.

Motorola has long-term earnings growth expectation of 7.7%.

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

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