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Nokia (NOK) Solutions to Power Tele2's Digitization Drive

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Nokia Corporation (NOK - Free Report) recently secured a contract for an undisclosed amount to deploy key infrastructure solutions for Tele2 subscribers in Sweden, Latvia, Lithuania and Estonia. In addition to improved network performance, the solutions are likely to accelerate the digitization drive of the leading European telecommunications operator with distributed cloud core offerings.

Nokia’s cloud core solutions will provide automation and optimization of the entire life cycle management of Tele2’s networks. The Cloud Packet Core fully integrates with a service provider’s own platform solutions for flexible deployment choices and will likely enable Tele2 to lay the foundation for 5G services. The solution integrates fixed wireline access into the 3GPP cloud-native core architecture for wireless and fixed convergence and will support both 4G and 5G core network functions.

The telecommunications infrastructure provider will deploy Subscriber Data Management and NetAct network management for Tele2. Subscriber data management is one of the key functions in telecommunication networks that enables carriers to effectively manage sensitive subscriber data in a centralized format in a secure User Data Repository. This central register with a single point of provisioning is likely to help the European carrier to accelerate time to market while introducing new technologies or services. The policy controller is a scalable network function that facilitates interoperability between 4G and 5G networks and can be deployed rapidly into multi-vendor networks.

In order to further improve network agility, Tele2 will also leverage Nokia Software’s NetAct Cloud network management system, which is cloud-agnostic and manages both radio and core networks. It provides diverse applications for fault management, configuration management, performance management and security management for holistic network management capabilities.

The state-of-the-art telecommunications equipment from Nokia will enable Tele2 to cost-effectively manage its network with minimal human intervention for ultra-low network latency, reliability and security features. It is also likely to enable the carrier to offer enhanced voice and data services while reducing network complexities across the Baltics.

Nokia is well positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. The company 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 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 facilitates 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. The company seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets. Nokia remains focused on building a robust scalable software business and expanding it to structurally attractive enterprise adjacencies. It has reached more than 100 commercial 5G contracts across the globe. The company’s end-to-end portfolio includes products and services for every part of a network, which are helping operators to enable key 5G capabilities, such as network slicing, distributed cloud and industrial IoT. Accelerated strategy execution, sharpened customer focus and reduced long-term costs are expected to position the company as a global leader in the delivery of end-to-end 5G solutions.

Shares of the company have lost 4.7% in the past year against the industry’s growth of 38.3%.

Nevertheless, we remain impressed with the inherent long-term growth potential of this Zacks Rank #3 (Hold) stock.

Some better-ranked stocks in the industry are Comtech Telecommunications Corp. (CMTL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Qualcomm Incorporated (QCOM - Free Report) and Sonim Technologies, Inc. (SONM - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Comtech delivered a positive earnings surprise of 2%, on average, in the trailing four quarters.

Qualcomm has a long-term earnings growth expectation of 19.6%. It delivered a positive earnings surprise of 17.3% in the trailing four quarters, on average, beating estimates thrice.

Sonim delivered a positive earnings surprise of 2.2%, on average, in the trailing four quarters.

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