Nokia Corporation’s NOK network unit, Nokia Solutions and Networks (“NSN”), recently cut a four-year deal with India’s leading telecom operator Bharti Airtel. However, the financial terms of the transaction have not been disclosed.
Per the deal, NSN will deliver its 3G wireless network equipment, including radio antennae, hardware, software along with network management and planning services, to Airtel’s three new and five existing network circles across India.
Moreover, NSN’s Flexi Multiradio 10 Base Station will help the Indian carrier enhance its 3G platform in the highly populated cities of Kolkata and Mumbai apart from saving costs. In addition, NSN will initiate the rollout of its cloud-based NetAct technology, which will further boost Airtel’s network efficiency across these telecom circles.
India is gradually gaining importance for telecom equipment suppliers as most carriers are either deploying new or upgrading 3G networks across vast areas. Thus, the contract win will certainly boost NSN’s network business, going forward. Moreover, over the last few quarters, the company performed impressively in the country, largely mitigating losses incurred in North America and Europe. Also, the deal will help NSN safeguard its position against network equipment suppliers like Ericsson ERIC and Huawei.
Notably, after the sale of Nokia’s core mobile handset and services division to Microsoft Corp. MSFT, NSN has become the company’s chief business division and accounts for approximately 90% of its total revenue.
Meanwhile, in a separate development, Nokia Networks entered into a definitive agreement with Alcatel-Lucent ALK to acquire the latter for a total consideration of Euro 15.6 billion (approximately $16.6 billion). Also, the board of directors of both the companies have accepted the terms of the deal, which is anticipated to close in the first half of 2016, subject to regulatory approvals.
Nokia currently carries a Zacks Rank #3 (Hold).
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