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Nokia, Orange Partner On 5G Network Optimization

Nokia announced a deal with telecom carrier Orange, under which the Finnish company will expand its Self Organizing Networks (SON) technology across Orange’s 5G networks. Nokia shares were up about 2% in Monday’s pre-market trading session.

This partnership covers all of the markets served by Orange. Nokia (NOK) already offers 2G, 3G and 4G support to more than a million Orange radio cells across Europe, the Middle East as well as Africa. Financial details of the deal were not disclosed.

Notably, Nokia’s self organizing networks technology can operate on any vendor’s radio technology, which means Orange can optimize its live commercial networks irrespective of which vendor built them.

Nokia’s Head of RAN, Mark Atkinson, said, “5G deployments and rollouts look much simpler on paper than they do in the real world. We appreciate and understand that our CSP customers have a technology stack that spans multiple vendors, which can lead to inefficiencies and complexity. Working with Orange and its global affiliates to optimize and simplify their multi-vendor networks is a challenge we relish and are proud to be part of.”

Orange’s Senior VP Radio Networks and 5G, Arnaud Vamparys, noted, “As a long-term partner, Nokia was a natural choice to help us automate our mobile networks in different geographies. The complexity of radio optimization is growing with 5G beamforming and Nokia’s flexible, automated and multi vendor platform enables us to maintain our exemplary network quality and customer satisfaction in the 5G era.” (See Nokia stock analysis on TipRanks)

On March 11, Raymond James analyst Simon Leopold reiterated a Hold rating on the stock but did not assign a price target.

Leopold argued, “Investor hopes stem from 5G, the Huawei backlash, and that a sum of the parts analysis reveals hidden value. However after experiencing a major contract loss with Verizon, a reorganization, worries regarding profitability vs innovation and multiple executive departures, this stock may require patience.”

Turning to the rest of the Street, the stock has a Moderate Buy consensus rating alongside an average analyst price target of $5.05 (19.7% upside potential). That’s based on 3 Buys and 3 Holds. Shares have rallied about  61.7% over the past year.

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