Nokia Boosts Swiss Rail Services With FRMCS Frequency Trial

Nokia (HE:NOKIA) Corporation (NYSE:NOK) recently announced that it has teamed up with the national railway company of Switzerland — Swiss Federal Railways — for the development of an innovative rail system for smartrail 4.0 project. In order to achieve this milestone, the Finnish network provider successfully completed a proof of concept trial of the Future Railway Mobile Communication System (“FRMCS”) standard.

Per the trial, both the companies leveraged LTE 1900MHz Time Division Duplex radio frequency and advanced measuring instruments to demonstrate the feasibility and efficacy of FRMCS. Markedly, FRMCS is the industry-leading global standard for advanced railway communications. Slated to be launched in 2025, the innovative framework provides high-speed, ultra-reliable and low-latency networks that enable smart rail maintenance with faster communications. Equipped with avant-garde network infrastructure, it also supports disruptive technologies like machine learning and AI. The pilot run, which primarily backs smartrail 4.0 project, was conducted in the districts of Fribourg and Neuchâtel.

Specifically designed for the enhancement of Swiss railway industry, smartrail 4.0 project is an innovative program which harnesses best-in-class digital capabilities to provide an engaging travel experience for rail passengers. The industry-wide initiative involves the participation of various Swiss transport companies. With improved safety and lower operating costs, the next-gen project offers ample opportunities to the railway companies to provide better customer service and manage European rail traffic with improved efficiency and punctuality. This, in turn, is likely to maintain the competitiveness of Swiss rail infrastructure in the long run.

Known to be the forerunner of Global System for Mobile Communications – Rail (GSM-R) and 5G radio networks globally, Nokia has already deployed private LTE networks in other transport industries. With the incorporation of 5G technology and FRMCS, the modernized rail infrastructure will enhance rail network performance and reliability for mission-critical applications, thereby meeting the infotainment and connectivity demands of operators and passengers. Markedly, the latest endeavor of Nokia is expected to be a game changer with the creation of new operating models and revenue streams amid intense competition and delayed 5G rollouts.

Nokia is focused on its strategy that centers on four priorities. The first priority is to lead in high-performance end-to-end networks with its communication service provider customers. The second priority is based on its relentless pursuit to expand network sales to select vertical markets, specifically energy, transportation, public sector, technical extra-large enterprises and webscale players. Building a strong standalone software business remains the third strategic priority. The fourth pillar aims to create new business and licensing opportunities in the consumer ecosystem.

The company is expanding business into targeted, high-growth and high-margin vertical markets to address several opportunities beyond its primary markets. However, competitive dynamics continue to take a toll on Nokia’s performance. Its Mobile Access business has been severely impacted by increased competition from arch-rivals — Ericsson (NASDAQ:ERIC) and Huawei. Also, some customers have reevaluated their vendors in light of security concerns, creating near-term pressure for the Finnish vendor.

Nokia’s shares have plunged 61.8% compared with industry’s decline of 18.7% in the past year. The Zacks Rank #3 (Hold) stock topped earnings estimates twice in the trailing four quarters but missed the same in the remaining quarters, delivering a positive surprise of 87.5%, on average.

A few better-ranked stocks in the broader industry are Comtech Telecommunications Corp. (NASDAQ:CMTL) and Telenav, Inc. (NASDAQ:TNAV) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech exceeded estimates in the trailing four quarters, the positive earnings surprise being 85.9%, on average.

Telenav outpaced estimates twice in the trailing four quarters, the positive earnings surprise being 77.1%, on average.

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