Nokia Corporation (NOK - Free Report) has announced that the State Grid Corporation of China (“SGCC”), the world’s largest utility company, will set up a programmable optical network using Nokia’s IP/Optical solutions. The Finland-based company has deployed more than 1,300 mission-critical networks with customers in the transport, energy, large enterprise, manufacturing, webscale and public sector segments.
SGCC provides electrical power to more than 1.1 billion people across 26 provinces, covering 88% of China’s national territory. The company is modernizing its communications infrastructure to meet the increased demand for transferring huge amounts of data across long distances. The latest move will enable SGCC to expand its network coverage to more power stations and offices while increasing capacity. The process covers new deployments in Hebei, Hunan provinces and Chongqing municipality, along with expansions in 10 other provinces.
The deployment leverages Nokia’s WaveFabric optical solutions to deliver a future-proof network that is reliable for critical services. Also, the solution supports bandwidth to connect high-voltage power stations and substations along the electrical power transmission line. Optical networks provide a better bandwidth network for data transmission compared to traditional communication solutions with wire cables.
By utilizing Nokia’s portfolio, SGCC is likely to benefit from an optical network that can be upgraded for higher capacity. With the Nokia 1830 Photonic Service Switch (PSS), SGCC’s regional backbone can be optimized for multi-service support. The 1830 PSS portfolio helps in improving optical networks to meet unpredictable traffic demands.
Meanwhile, Nokia is positioned to benefit from copper and fiber deployments of passive optical networking. The company expanded its IP routing business into the data center market. Nokia seeks to expand its business into targeted, high-growth and high-margin vertical markets to address opportunities beyond its primary markets.
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. Nokia is witnessing a healthy momentum in its focus areas of software and enterprise, which augurs well for its licensing business.
Nokia’s shares have lost 8.8% in the past year against 20.1% 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 15.2%.
Currently, Nokia carries a Zacks Rank #2 (Buy) and has a VGM Score of B.
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