Company Update: Nokia Oyj (ADR) (NOK) Signs MoU with Vodacom


Nokia Oyj (ADR) (NYSE:NOK) and Vodacom have signed an MoU under which the companies will trial Nokia 5G technology to accelerate the launch of the new technology and enable Vodacom to drive digitalization for the benefit of businesses and individuals in South Africa.

Nokia has a 5G portfolio that will allow operators to gain an early-to-market advantage in the delivery of ultra-fast mobile broadband services that leverage multi-Gigabit speeds and ultra-low latency. Working with Vodacom in a series of workshops and trials, Nokia will share its latest 5G innovations including massive MIMO Adaptive Antennas, AirScale Radio Access, AirGile Cloud-native Core, Multi-Access Edge Computing, and end-to-end Mobile Anyhaul transport networks to test how they can be used to meet ever-changing demand in the country.

Initially the companies will focus on the delivery of Ultra-HD and virtual reality video services, leveraging the enhanced mobile broadband and ultra-low latency capabilities of 5G. Vodacom andNokia will also collaborate to understand how 5G can drive continued economic growth in vertical industries important to South Africa including manufacturing, mining, healthcare, media, energy and transportation.

Nokia will leverage expertise from its Bell Labs Consulting arm to work with Vodacom and identify where, when and how to evolve its network to 5G.

Andries Delport, Vodacom Group Chief Technology Officers commented: “As the leading mobile network provider in South Africa, with the best 3G and 4G networks,  it was crucial for us to partner a formidable player such as Nokia as we’re gearing ourselves for the next generation of wireless networks, 5G. This collaboration comes at a time when we have a firm mandate from the Vodacom Board to propel Vodacom Group to become a leading digital company. It is my firm belief that the adoption of 5G will help us to deliver against some of the digital technologies in areas such as big data analytics, artificial intelligence, virtual and augmented reality, autonomous vehicles and the Internet of Things. Quite crucially, Africa is in the middle of a mobile connectivity boom, and as such, 5G will help us to deliver faster internet speeds to our almost 70 million customers across the Group.”

Rajen Naidoo, head of Vodacom South Africa Cutomer Team at Nokia, said: “We have defined a technology path that allows operators to transition to 5G at their own pace. Working with Vodacom, we can help it identify how 5G can support growth in the country and the steps it should take in its own transition to best meet individual subscriber and enterprise needs.

Shares of Nokia are currently trading at $4.98, down $0.11 or -2.06%. NOK has a 1-year high of $6.65 and a 1-year low of $4.04. The stock’s 50-day moving average is $5.73 and its 200-day moving average is $6.09.

On the ratings front, NOK stock has been the subject of a number of recent research reports. In a report issued on October 31, Charter Equity Research analyst Edward F. Snyder downgraded NOK to Hold. Separately, on October 30, Argus’ Jim Kelleher downgraded the stock to Hold .

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Edward F. Snyder and Jim Kelleher have a yearly average return of 21.5% and 24.8% respectively. Snyder has a success rate of 73% and is ranked #477 out of 4703 analysts, while Kelleher has a success rate of 75% and is ranked #88.

Overall, 5 research analysts have assigned a Hold rating and one research analyst has given a a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $4.83 which is -5.1% under where the stock closed yesterday.

Nokia provides network infrastructure, technology and software services. It operates through the following segments: Ultra Broadband Networks, IP Networks & Applications and Nokia Technologies. The Ultra Broadband Networks segment comprises mobile networks and fixed networks. The IP Networks and Applications segment comprising IP/Optical networks and applications & analytics. The Nokia Technologies segment focuses on advanced technology development and licensing.