Nokia (NOK) is not taking the decision by the Romanian government to block it from selling 5G equipment in the country lightly. The company has launched a legal challenge to Romania’s ban. It wants the government to explain why it took the step of excluding it from the Romanian 5G market.
“We are seeking urgent clarification for the reasons for this decision and have instigated legal proceedings,” Reuters quoted Nokia as saying in a statement.
In February, the Romanian government informed Nokia that it was not allowed to sell its 5G gear in the country. Previously, Romania barred China’s Huawei from its 5G market. Huawei’s 5G equipment is also banned in other countries, including the U.S.
Nokia in Romania
Nokia is among the world’s leading telecom gear vendors, along with Huawei and Ericsson (ERIC). In Romania, it has sold 5G equipment to Digi, which also operates in Spain, Italy, and Hungary. Vodafone Romania is a subsidiary of Vodafone (VOD), which is a Nokia 5G customer in a number of markets. Telekom Romania Mobile’s parent Deutsche Telekom (DTEGY) and Orange Romania’s parent Orange (ORAN) are also Nokia’s 5G customers in a number of countries.
What Is Nokia Trying to Do?
Nokia is hoping to overturn the government’s ban to ensure access to Romania’s potentially lucrative 5G market. After Huawei got locked out, the Romanian 5G market had been left to Nokia and Ericsson to dominate. But the Nokia ban, if it stands, means Ericsson would have free rein in Romania, which could be a major blow to Nokia’s sales and efforts to grow its global 5G market share.
Wall Street’s Take
Consensus among analysts is a Strong Buy based on four Buys and one Hold. The average Nokia price target stands at $7.01 and implies upside potential of 28.4% to current levels. Shares have declined 13% year-to-date.
Stock Investors
TipRanks’ Stock Investors tool shows that investor sentiment is currently Very Positive on Nokia, with 6.1% of portfolios tracked by TipRanks increasing their exposure to NOK stock over the past 30 days.
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