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Nokia Ramps Up Open RAN for Flexible Network Architecture

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Nokia Corporation (NOK - Free Report) furthered leadership in open solutions by ramping up the adoption of Open RAN (O-RAN) interfaces in its AirScale portfolio. The Finland-based telecom gear maker is committed to the advancement of open mobile by investing in O-RAN and Cloud RAN solutions. Nokia is considered an advocate of RAN network openness and has been effective in various open source communities, contributing code and defining open interface specifications.

The augmentation is aimed toward enabling an open ecosystem of innovation, while ensuring network performance and security. The new O-RAN capabilities will be built in control of Nokia’s AirScale software. The company’s investment in O-RAN gives assurance to communication service providers in adopting openness to secure telecom supply chain.

An initial set of O-RAN functionalities will be available this year, while the full suite of O-RAN-defined interfaces is planned for 2021. Nokia’s Cloud RAN solution continues to evolve into a cloud-native architecture. Nokia has made significant investments in O-RAN by leading the deployment of the RAN Intelligent Controller (“RIC”) and the open fronthaul.

Recently, the company announced the next-generation of its AirScale Cloud RAN portfolio. Its customers will likely benefit from the flexibility to define their network architecture without jeopardizing performance or security. The RIC helps service providers open up novel opportunities. One of them is the RAN programmability for easy integration of AI and ML algorithms to automatically optimize the network.

When implemented on the network, the RIC platform will enable increased network optimization capabilities through closed-loop automation. A few days ago, Nokia successfully conducted a trial of the RIC on AT&T’s (T - Free Report) 5G network in New York. This was a milestone toward the advancement of RAN network intelligence, openness and programmability to improve wireless network efficiency as well as end-user experience.

Nokia is developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset. The company is working with multiple partners to support its ReefShark family of chipsets, which are used in many base station elements. Nokia is witnessing a healthy momentum in its focus areas of software and enterprise, which augurs well for its licensing business.

The company’s end-to-end portfolio includes products and services for every part of a network, which helps operators enable key 5G capabilities such as network slicing, distributed cloud and industrial IoT. It facilitates customers to move from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and automation.

Nokia seeks to expand its business into targeted, high-growth and high-margin vertical markets to address opportunities beyond its primary markets. It had earlier announced plans to accelerate strategy execution, sharpen customer focus and reduce long-term costs. This, in turn, is likely to position the company as a global leader in the delivery of end-to-end 5G solutions.

Nokia has a long-term earnings growth expectation of 15.6% compared with 14.8% of the industry. The stock has returned 14.4% compared with the industry’s growth of 1.3% in the past six months.

Nokia currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B.

Some other top-ranked stocks in the broader industry are T-Mobile US, Inc. (TMUS - Free Report) and Bandwidth Inc. (BAND - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T-Mobile has a trailing four-quarter positive earnings surprise of 19.4%, on average.

Bandwidth has a trailing four-quarter positive earnings surprise of 89.4%, on average.

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