Handset manufacturing giant – Nokia Corporation (NOK - Analyst Report) – has entered into a partnership with Indian telecom carrier Bharti Airtel Limited, allowing the latter to offer some of Nokia’s value added service (VAS) in Africa.
The deal is expected to boost the revenue of Nokia’s mobile application store that offers both national and international content.
As per the deal, Bharti will start selling popular Nokia VAS like Life services, Xpress browser and Store Operator Billing. Nokia Life service provides customised information in the field of education, agriculture, healthcare and livelihood, which are delivered by text at a relatively lower cost than other sources.
Nokia Life service is already available in 18 different languages and is being accessed by more than 95 million people. Nokia Life is already available in Nigeria and Bharti will extend its reach within the continent by launching it in Kenya this month. The partnership will be the first of its kind for Nokia in Africa, where smartphone sales are expected to climb by 56% in 2013. This in turn will drive larger volume of apps and game downloads, thus improving the prospect of Nokia’s Value added services.
Other areas of collaboration include Nokia Xpress browser a cloud based internet platform, which provides customers with increased download speed by compressing data. On the other hand, Nokia’s billing solution will allow customers to download apps and games from the Nokia store, charges for which will be included in their monthly phone bills.
For the last couple of years, Nokia has been combating market share loss to Apple Inc.’s (AAPL - Analyst Report) iPhone and other smartphones running on Google Inc.’s Android operating system. Lack of application has been one of the main reasons why Nokia is lagging. Both Google and Apple have more than 800,000 applications while Nokia has only 100,000 applications in its kitty.
We believe that tying up with Bharti will popularize Nokia’s applications and draw in smartphone users of the other operating platforms. It will also act as an additional source of revenue for the Finnish handset manufacturer.
Nokia currently carries a Zacks Rank #3 (Hold). Among the other companies in the same industry where Nokia operates, Interdigital Inc. (IDCC - Snapshot Report), with a Zacks Rank #2 (Buy), is a better option for the investors.