Nokia Corporation NOK recently announced that it has entered into a three-year agreement with Vodafone Idea Limited (“VIL”) to enhance and expand its 4G and 5G networks in India. This collaborative effort is aimed at strengthening VIL’s mobile core network to meet the evolving demands of its customers through access to Nokia’s advanced connectivity and technology solutions.

Digging Deep Into the NOK-VIL Deal

Per the agreement, Nokia will deploy base stations, baseband units and Massive MIMO radios from its state-of-the-art industry-leading 5G AirScale portfolio. This product suite powered by the energy-efficient ReefShark System-on-Chip technology will likely ensure an efficient and scalable network coverage with high capacity to address various advanced applications. Additionally, VIL's existing 4G network will be upgraded with multiband radios and baseband equipment, which are compatible with future 5G requirements.

Furthermore, VIL will benefit from Nokia's MantaRay SON platform, renowned for its network optimization and automation capabilities. This solution features self-configuring modules that enhance network performance and efficiency, tailored to meet specific operational challenges and growing complexity. 

Additionally, Nokia will provide comprehensive planning, integration, and network optimization services. The deployment of Nokia's equipment across major Indian cities is set to begin immediately.

Will the Collaboration Drive NOK’s Performance?

With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has increased in recent times. Further, to maintain superior performance as traffic increases, there is also a continuous need for network tuning and optimization. 

This partnership builds on Nokia’s existing role as a major supplier for VIL and aims to modernize the operator’s 4G infrastructure, delivering premium connectivity to approximately 200 million customers. As part of the deal, Nokia will also increase its market share and replace the incumbent vendor in Chennai, Tamil Nadu and Andhra Pradesh, making it the largest supplier covering circles that generate more than half of VIL's revenue.

All these advancements are expected to generate incremental demands for Nokia’s solutions, leading to higher revenues. Improving financial performance is likely to propel the stock upward.

NOK’s Stock Price Performance

Shares of Nokia have gained 17.4% over the past year compared with the industry’s growth of 54%.