Nokia Corporation NOK recently signed an agreement with KDDI Corporation for an undisclosed amount to support the Japan-based operator’s transition to a fully automated 5G base architecture. The deal is likely to improve network scale to allow subscribers to benefit from lower latency, increased bandwidth and higher capacity. The contract also strengthens the 25-year business relationship between the two companies.
As part of the transaction, Nokia will offer 5G core stand-alone solutions for near-zero automation capabilities, along with associated software support and integration. In addition, the company will provide 5G monetization and data management software solutions to unlock future income-generating opportunities. These include cloud-native converged billing – used to consolidate all service charges into a single customer invoice, the policy controller which acts as a safeguard for greater security, and the mediation which converts call data. in predefined layouts for a specific billing system.
These cutting-edge solutions are expected to enhance KDDI’s flexibility to better meet changing market demands and reduce costs by streamlining operations. In addition, they are likely to support its business model for B2B2X services by enabling service-based integrations with new 5G network functions. The B2B2X business model allows an operator to provide services to any number of end users by integrating telecommunications and IT service capabilities with applications used by various businesses. Nokia will also offer KDDI its Digital Operations software, Cloud Operations Manager, NetAct network management system and Archive Cloud solutions to automate network data backup and storage in multi-vendor and multi-technology environments.
The commercial availability of Nokia’s autonomous 5G network has taken it another important step in the evolution of the 5G ecosystem to make it more widespread across the world. 5G networks have so far been deployed primarily in non-autonomous mode, with the availability of the 5G network dependent on the underlying LTE network for signaling support. The stand-alone 5G network eliminates this dependence on 4G by allowing operators to increase their network capacities with a simpler architecture. In addition, it improves network speed and simplifies mobility management with seamless access to 5G broadband for better user experience.
The company is leading the transition of global businesses to intelligent 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. Using cutting-edge technology, Nokia is transforming the way people and things communicate and connect. These include a seamless transition to 5G technology, ultra-broadband access, IP and software-defined networking, cloud applications and the Internet of Things.
The company helps customers move from an economy-of-scale network operating model to demand-driven operations by providing easy programmability and flexible automation to support dynamic operations, reduce complexity and improve efficiency. Nokia remains focused on building a robust and scalable software business and expanding into structurally attractive business adjacencies. He has signed more than 204 5G commercial contracts around the world. The company’s end-to-end portfolio includes products and services for every part of a network, which help operators activate key 5G features, such as network slicing, distributed cloud and Industrial IoT. Faster strategy execution, increased customer focus, and long-term cost reduction are expected to position the company as a global leader in providing end-to-end 5G solutions.
The stock has gained 39.4% in the past year compared to the industry rally of 12.2%. We remain impressed with the inherent growth potential of this Zacks Rank # 3 (Hold) stock.
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A better ranked stock in the industry is Clearfield, Inc. CLFD, sporting a rank 1 of Zacks (strong buy). You can see The full list of today’s Zacks # 1 Rank stocks here.
Clearfield has made a surprise profit of 50.8% on average over the past four quarters. Current-year earnings estimates for the stock have risen 68.2% since January 2021. In the past year, Clearfield has gained a solid 145.6%.
Qualcomm Incorporated QCOM, carrying a Zacks Rank # 2 (Buy), is another solid choice for investors. It forecasts long-term earnings growth of 15.3% and has generated a surprise of 11.2% on average over the past four quarters.
Current-year profit estimates for the stock are up 35.4% from a year ago. Qualcomm is expected to benefit in the long term from strong 5G traction and increased demand for critical products that are the building blocks of digital transformation in the cloud economy.
Sierra Wireless, Inc. SWIR wears a Zacks Rank # 2. It has a forecast for long-term earnings growth of 12.5% ââand delivered a surprise of 34.2%, on average, over the past four quarters.
Over the past year, Sierra Wireless has gained 4.3%. The company continues to launch innovative products for mission-critical operations that require high security and optimal 5G performance.
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