Nokia (NOK) and Russia’s YADRO are in the process of setting up a joint venture (JV) that will develop stations for 4G and 5G networks in Russia. Reuters reports that the two will build the networks using Russian equipment only. NOK shares rose 0.70% to close at $5.76 on November 24.
Nokia is a company that specializes in the provision of infrastructure, technology, and software services. It operates through the Ultra Broadband Networks, Global Services, IP Networks and Applications, and Nokia Technologies segments.
Nokia-YADRO Joint Venture
Nokia and YADRO have already inked a term sheet with the aim of setting up the joint venture in Russia. Terms of the deal or the investment remain under wraps. However, a report by the Kommersant daily indicates that YADRO will own a 51% stake in the JV, with Nokia taking up the remaining 49%.
Russia has already hinted at extending the two companies licenses’ beyond 2023 for the LTE networks, as long as they commit to building the networks using Russian equipment. The push is part of Moscow’s latest plan that seeks to enhance the use of domestic technology and IT services. (See Top Smart Score Stocks on TipRanks)
Industry and Trade Minister Denis Manturov says the joint venture between Nokia and YADRO will develop telecom equipment in Russia. Construction is scheduled to begin in December. Manufacturers in the country currently account for only 21% of the $2.26 billion state telecoms’ equipment procurement contracts.
Last month, Bank of America analyst Didier Scemama reiterated a Hold rating on Nokia and a $6.91 price target, implying 19.97% upside potential to current levels.
Consensus among analysts is a Moderate Buy, based on 1 Buy and 1 Hold. The average Nokia price target of $6.95 implies 20.66% upside potential to current levels.