Will the Expanded Collaboration With Bharti Airtel Benefit Nokia?

Nokia Corporation NOK recently revealed that it has expanded its collaboration with Bharti Airtel to enhance 4G and 5G network infrastructure across India, leveraging its Packet Core appliances and Fixed Wireless Access solutions. 

Digging Deep Into the NOK-Airtel Deal

Nokia’s state-of-the-art infrastructure-agnostic packet core solution offers critical components required for a webscale-class evolved packet core and 5G core system. The solution’s virtualized, cloud-native disaggregated and state-efficient design enables communication service providers to meet the high-performance and capacity demands of edge computing. By leveraging these pre-packaged software units for 5G standalone readiness, Bharti Airtel is set to advance its network toward the next generation of 5G technology. 

The solution will likely simplify Airtel’s network architecture, enabling the operator to handle the rapidly increasing demand for data while reducing operational costs. The integration of appliance-based Packet Core gateways will further help Airtel optimize its hardware footprint and reduce its cost per bit while maintaining other network elements in a cloud-native setup.

Bharti Airtel will also benefit from Nokia’s comprehensive portfolio of Fixed Wireless Access solutions that equips operators with a wide range of Wi-Fi devices and FastMile gateways tailored to meet their unique and diverse needs. The deployment will also leverage Nokia’s automation framework to enable zero-touch service launches and optimize lifecycle management for core network functions. These upgrades will help Airtel accelerate the introduction of new services cost-effectively.

Will This Deal Extension Drive NOK Shares?

With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has recently increased. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. Nokia’s expertise in mission-critical networks is well-established, with deployments across more than 2,600 leading enterprise customers in the transportation, energy, manufacturing, webscale and public sector segments worldwide. 

Being a long-standing partner of Bharti Airtel, the company has been providing several core technologies, including Voice over LTE, Home Subscriber Server, Home Location Register, Unified Data Management and Voice over New Radio, along with automated Management & Orchestration over years. The extension of this partnership will further strengthen Airtel’s customer experience and meet the fast-growing demand for data services. 

These advancements are likely to propel the stock with incremental revenue generation and inducement of similar deals from other carriers in the future. The deal is also expected to strengthen Nokia’s position as a leading telecommunications equipment provider in India.

NOK Stock Price Performance

Shares of Nokia have gained 49.5% over the past year compared with the industry’s growth of 42.7%.

NOK’s Zacks Rank and Key Picks

Nokia currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry have been discussed below.

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. The company is a pioneer in advanced mobile technologies that enable wireless communications and capabilities.

InterDigital engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. 

CommScope Holding COMM currently sports a Zacks Rank #1. It has a long-term growth expectation of 19.37%. 

Headquartered in Hickory, NC, CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. Since its inception in 1976, the company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration. CommScope currently operates in three segments — Connectivity and Cable Solutions, Networking, Intelligent Cellular and Security Solutions and Access Network Solutions. 

Arista Networks, Inc. ANET, carrying a Zacks Rank of 2 (Buy) at present, supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers. Arista delivered a trailing four-quarter average earnings surprise of 12.87% and has a long-term growth expectation of 14.41%. Arista currently serves five verticals, namely – cloud titans (customers that deploy more than one million servers), cloud specialty providers, service providers, financial services and the rest of the enterprise.

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