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Nokia (NOK) Modernizes Deutsche Telekom's Networks for 5G Era

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Nokia Corporation (NOK - Free Report) has extended its long-standing partnership with Deutsche Telekom AG (DTEGY - Free Report) to build a 5G-ready IP network. Nokia’s 7750 Service Router (SR) platform has been chosen by Deutsche Telekom to increase capacity across the latter’s edge/core routing network.

Deutsche Telekom is modernizing its networks for next-generation broadband and 5G services. The 7750 SR portfolio delivers high performance and flexibility to support a range of IP services for service providers, webscale and enterprise networks.

Nokia has started replacing the operator’s existing IP network in Greece, while rollout in Hungary is expected in the ongoing quarter. Nokia’s 7750 SR-7s routers support the full spectrum of provider edge, gateway and core functions. The 7750 SR-s is managed by the Nokia Network Services Platform (NSP).

NSP supports 5G IP transport with automated slicing across IP and optical transport layers to simplify operations and respond quickly to the fast changing subscriber demand. With the advent of 5G, networks are expected to handle hundreds of new applications and services for millions of users. Nokia 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 the 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.

Nokia aims to accelerate its product roadmaps and cost competitiveness through additional 5G investments in 2020. The company has been developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset. The Finland-based telecom equipment provider currently has 124 commercial 5G deals with operators.

The company is well positioned to benefit from copper and fiber deployments of passive optical networking. It has 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 focused on its strategy that broadly hinges on four priorities. The first priority is to lead in high-performance networks with its communications service provider customers. The second one is expansion of network sales to select markets, specifically energy, transportation, public sector, technical extra-large enterprises and webscale players. Building a strong standalone software business is the third priority. Fourthly, it aims to create new business and licensing opportunities in the consumer ecosystem.

Nokia’s shares have gained 8.1% in the past year compared with 32.8% growth of the industry.

Nokia currently has a Zacks Rank #4 (Sell).

A couple of better-ranked stocks in the broader industry are Plantronics, Inc. (PLT - Free Report) and United States Cellular Corporation (USM - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.

U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.

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