Nokia (NOK), Orange Gear Up For 5G With Cloud RAN Trial

Nokia (HE:NOKIA) Corporation (NYSE:NOK) in collaboration with Orange has completed a live network trial in Poland, in an effort to demonstrate how the use of cloud optimized Radio Access Network (RAN) would benefit the progression to 5G. This cloud RAN trial was the first of its kind in operational LTE network in Europe to be conducted using the operator’s own cloud infrastructure.

The trial marked an important milestone in Orange’s upcoming distributed cloud architecture for 5G. The AirScale Cloud RAN of Nokia provides the flexibility as and when different requirements for 5G, IoT, low-latency services and end-to-end slicing crop up.

Technicalities of the Trial

The trial, which lasted from March to the beginning of May, had radio sites in Chelm and the virtualized part of the baseband around 70 km away in a data center in Lublin. Nokia's AirScale Cloud Base Station software split the baseband processing load across the radio cell sites and data center, delivering equally strong network performance on both Nokia's reference cloud infrastructure and on Orange's own cloud environment.

The company’s software architecture enables on-time performance of crucial functions, at the cell site. These functions are then connected via Ethernet fronthaul, enabling the operator to use its existing transport network. Meanwhile at the data center, non-real-time functions are delivered cost-effectively by centralized software.

Nokia’s Position in the 5G Race

Nokia has conducted a number of transmission trial projects in different countries this year in collaboration with many companies. For instance, it launched new 5G services and successfully completed a 5G transmission test in China earlier this month. Nokia boasts a number of relevant technologies and services that enable it to constantly pursue strategic innovations to strengthen its position in the market, as the industry transitions toward 5G.

Price Performance

Nokia’s continuous efforts and aggressive steps to secure its position in the 5G market look promising. In the past three months, the stock has outperformed the industry with an average return of 6.1% compared with 4.8% rise for the latter.

Zacks Rank and Stocks to Consider

Nokia currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry space are Comtech Telecommunications Corp. (NASDAQ:CMTL) , sporting a Zacks Rank #1 (Strong Buy) and Motorola Solutions, Inc. (NYSE:MSI) and Ubiquiti Networks, Inc. (NASDAQ:UBNT) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech has an expected long-term earnings growth rate of 5%.

Motorola has an expected long-term earnings growth rate of 8%.

Ubiquiti has an expected long-term earnings growth rate of 18.6%.

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