Nokia (NOK) Secures Key Deals to Boost 5G Market Foothold

Nokia Corporation NOK recently secured a slew of contracts from diverse entities that strengthened its market presence related to the 5G domain. The deals also ensured a steady stream of revenues for the telecommunications equipment manufacturer and offered a key opportunity to harness its growth potential.

The National Cybersecurity Center of Excellence selected Nokia as the technology provider and collaborator for the 5G Cybersecurity Project. The federal agency aims to leverage the technology prowess of the company for a seamless transition from 4G to 5G networks. Deploying its industry-leading software, 5G RAN and IP-Backhaul solutions for this project, Nokia will partner with a cross-section of government and industry collaborators on board to help develop a reference design and build use cases on standards-based solutions.

In particular, the project intends to identify certain 5G use cases to showcase the efficacy of the components of 5G architecture against security threats. It aims to demonstrate how potential risks are mitigated through standardized 5G security features that also abide by the related compliance requirements. The enhanced cybersecurity capabilities on display are likely to allay deep-rooted fears and mistrust within business enterprises triggered by malicious cyber threats from data hackers. The project is part of the U.S. government initiative to better encrypt communications to thwart snooping attempts and build robust communication networks through anti-spying mechanism tools.

Nokia also secured a five-year deal from T-Mobile US, Inc. TMUS that strengthened its long-standing business relationship with the carrier. Utilizing Nokia’s AirScale Radio platform, T-Mobile will aim to power its 2.5GHz mid-band spectrum to full potential for extensive 5G deployment. The AirScale Radio Access products deliver low-latency, high-capacity mobile connectivity with low cost of ownership. The products help to reduce network complexity, and can be easily upgraded through a software update. In addition to boosting the broadband connectivity, Nokia will facilitate T-Mobile to upgrade its mid-band LTE network to superfast 5G network.

In another key development, Nokia inked a partnership with Google Cloud – the cloud computing services of Alphabet Inc. GOOGL. Per the deal, the two firms will work in unison to support businesses’ digital transformation at the network edge through both 5G connectivity and cloud-native applications and capabilities. The partnership aims to develop new solutions for communication service providers that would help them modernize network infrastructure for the smooth transition to cloud-native 5G core. This, in turn, is likely to build an ecosystem of services that are deployable anywhere, from the edge of the network, to public clouds, private clouds and carrier networks.

Riding on such coveted deals, Nokia is well positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. 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 software and services to manage them. Leveraging state-of-the-art technology, Nokia is transforming the way people and things communicate and connect. These include seamless transition to 5G technology, ultra-broadband access, IP and Software Defined Networking, cloud applications and IoT.

Shares of the company have lost 2.6% in the past year against the industry’s growth of 39.7%.

Nevertheless, we remain impressed with the inherent long-term growth potential of this Zacks Rank #3 (Hold) stock. A better-ranked stock in the industry is Qualcomm Incorporated QCOM, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1(Strong Buy)stocks here.

Qualcomm has a long-term earnings growth expectation of 19.6%. It delivered a positive earnings surprise of 17.3% in the trailing four quarters, on average, beating estimates thrice.

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