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Nokia to Transform BT's Network in UK for 5G-Based Services

Zacks Equity Research
·3-min read

Nokia Corporation NOK has expanded its long-standing technology partnership with BT Group. The Finland-based telecom gear maker has been selected as a 5G RAN vendor for the operator. BT is the largest provider of fixed-line, broadband and mobile services in the United Kingdom.

Of late, Nokia is making good progress in its Mobile Access business while enhancing cash generation. The company aims to accelerate its product roadmaps and cost competitiveness through additional 5G investments in 2020. It is seeing a healthy momentum in its focus areas of software and enterprise, which augurs well for the licensing business.

In this deal, which will make Nokia the largest infrastructure partner of BT, the former will provide equipment and services at the radio sites of the latter across the country. BT’s Nokia-driven network, which is currently available in Greater London, the Midlands and rural places, will be expanded to cover several other locations.

Nokia will supply its AirScale Single RAN portfolio for indoor and outdoor coverage. This includes 5G RAN, AirScale base stations and AirScale radio access products. These solutions will enable BT to build on its existing network leadership to deliver connectivity benefits to its customers while increasing cost efficiencies.

Moreover, Nokia will optimize BT’s 2G and 4G networks and work together on the development of the OpenRAN ecosystem. Nokia is the only global supplier committed to Open RAN with commercial 5G Cloud-RAN networks. The company is well positioned to benefit from copper and fiber deployments of passive optical networking.

BT will use Nokia Software’s ng-SDM and NetAct network management platform for the network evolution to 5G. Nokia will provide its Cell Site Gateway product providing key backhaul connectivity. Its AirScale Radio Access is a complete solution that helps operators to address the increasing demand for digital connectivity.

Nokia enables its customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation needed to support dynamic operations, reduce complexity and improve efficiency. It has expanded its IP routing business into the data center market.

The company seeks to expand its business into targeted, high-growth and high-margin vertical markets to address opportunities beyond its primary markets. Nokia is developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset.

Nokia’s shares have returned 27.9% in the past six months compared with 44.5% growth of the industry. The company has a long-term (three to five years) earnings growth expectation of 15.6% compared with the industry’s 15%.



Nokia has a Zacks Rank #3 (Hold), at present.

Some better-ranked stocks in the broader industry are Corning Incorporated GLW, Vocera Communications, Inc. VCRA and Acacia Communications, Inc. ACIA, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Corning delivered a trailing four-quarter positive earnings surprise of 39.9%, on average.

Vocera delivered a trailing four-quarter positive earnings surprise of 70%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Acacia pulled off a trailing four-quarter positive earnings surprise of 17%, on average. The company’s earnings topped the consensus estimate in three of the last four quarters.

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