Nokia Nabs 5G Multi-Year Contract With A1 Austria

Nokia Corp. announced that the telecom operator has been awarded a multi-year contract by A1 Austria for providing 5G network coverage across the country. Financial terms of the deal weren’t disclosed.

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Under the terms of the contract, Nokia (NOK) will supply 5G radio access and core network services. The companies expect to launch the 5G core element in the first half of this year.

The two companies have a long-standing partnership. In the past, they have joined up to expand to 3G and 4G mobile networks and worked on the rollout of the largest fiber optic network in Austria. They have also deployed multiple private campus networks in Austria.

As part of the current contract, Nokia will provide its AirScale portfolio which includes 5G RAN, AirScale base stations and Nokia AirScale radio access products to A1 Austria. Following a successful pilot, A1 Austria will launch 4G and 5G network slicing commercially.

Slicing continuity among networks enables operators to maximize network coverage for new mobile connectivity services.

Nokia’s President of Mobile Networks Tommi Uiitto said, “We are delighted to extend our long-standing partnership with A1 Austria in the 5G era. We take this expansion project as an affirmation that our technology is best in class.” (See Nokia stock analysis on TipRanks).

Earlier this month, DNB Markets analyst Frank Maao upgraded NOK to Buy from Sell and increased the price target to $5.80 (41.7% upside potential) from $4.83.

Maao noted, “The stock price has come down after the recent retail frenzy and Ericsson’s 4Q indicates strength in 5G cycle in Northeast Asia excluding China. Nokia’s capital markets day in March could be another catalyst and there can be increasing order momentum from those looking to diversify away from Chinese gear.”

The rest of the Street has a Moderate Buy consensus rating on the stock. That’s based on 3 Buys versus 4 Holds. The average analyst price target of $4.79 implies almost 17% upside potential to current levels.