Nokia Corporation’s (NOK) wholly-owned subsidiary Nokia Solutions and Networks (“NSN”) was picked by Mobile TeleSystems (MTS), a leading telecom operator in Russia, to upgrade its network in Ukraine and Turkmenistan. The financial terms of the deal were not disclosed.
MTS will be rolling out extra 3G base stations in Turkmenistan – where NSN will lend core network support that will include Mobile Softswitching (MSS) systems and Multimedia Gateway (MGW) to manage MTS voice and multimedia services.
Apart from core network supports, NSN will be supplying its Single RAN (radio access network) technology to upgrade a large area of the existing sites. Moreover, the company will also provide its Multicontroller Platform for the 3G Radio Network Controller (RNC), 2G Base Station Controller (BSC) and related 2G Transcoder (TC).
Last month, MTS struck a $200-million deal with NSN to help the company to supply necessary instruments required to deploy 4GLTE technology across Moscow and Central Russia.
Higher adoption of smartphones and tablets has resulted in huge network congestion. So, to improve network speed, most carriers are continuously upgrading their network capacity by deploying 4GLTE technology.
NSN’s 4GLTE equipment are widely used by most carriers and are hugely popular after Ericsson (ERIC) and Huawei. In the recently concluded second-quarter 2013, NSN segment generated $3.64 billion of revenues. Europe with 28% contribution to the revenues was one of the leading contributors. Thus, we believe that wining such major contracts in Ukraine and Turkmenistan will certainly bolster the company’s top line.
Moreover, the world’s largest telecom operator, China Mobile Limited (CHL), is targeting to deploy nearly 200,000 TD-LTE base stations by the end of 2013. This will further boost NSN’s 4GLTE equipment business.
NSN used to be a 50-50 joint venture between Nokia and German-based Siemens AG (SI). Recently, Nokia paid $2.15 billion to acquire the remaining stake of NSN from Siemens AG.
Nokia currently carries a Zacks Rank #3 (Hold).
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