Nokia Corporation’s (NOK) wholly-owned subsidiary Nokia Solutions and Networks (“NSN”) has recently struck a deal with leading Taiwanese telecom operator, Chunghwa Telecom Co., Ltd. (CHT). However, the financial terms of the deal were not revealed.
Following the contract, the Taiwanese carrier has also renewed its previous agreement with NSN as the only supplier of its HSPA+ network to further increase the network capacity.
Chunghwa Telecom is planning to deploy 4GLTE networks across the country by the end of 2014, which is why it has selected NSN as its supplier. NSN will be supplying its RAN (radio access network) superior technology, well supported with Flexi Multiradio 10 Base Station to the carrier. Moreover, it will also deliver circuit-switched fallback (CSFB) technology, which will support voice services for LTE smartphone users.
Higher adoption of smartphones and tablets has resulted in network congestion. So, to improve network speed, most carriers are continuously upgrading their network capacity by deploying 4GLTE technology.
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 in Asia.
NSN’s 4GLTE equipment is widely used by most carriers and are hugely popular after Ericsson (ERIC) and Huawei. In the recently concluded third-quarter 2013, the NSN segment generated $3.4 billion of revenues.
However, its Asia-Pacific region, which contributed nearly 31% of the total business, faced the highest drop in revenue of nearly 38% as compared to the prior-year quarter. Thus, we believe that wining such major contracts in Taiwan and China will certainly bolster the company’s top line.
Nokia currently carries a Zacks Rank #3 (Hold).