Nokia Forays Into Space Communications With NASA Partnership

Zacks Equity Research
·4-min read

At a time when telecom companies are competing against each other to augment their footprint with enhanced network capacity, Nokia Corporation NOK has taken the competition to a higher level by establishing the first-ever cellular network on the lunar surface. Reportedly, the telco giant has been selected by National Aeronautics and Space Administration (“NASA”) as its technology partner to support streamlined lunar surface communications on the back of a 4G network. Touted as Nokia’s debut attempt to launch a Long-Term Evolution (LTE) network on the moon, the partnership is seen as a lucrative opportunity to gain deeper insights as to how terrestrial technology can provide reliable communications infrastructure in the lunar environment.

The contract has been given to Nokia’s research wing — Bell Labs — for an amount of $14.1 million. The lunar network encompasses Radio Frequency antennas, operations and maintenance control software, LTE User Equipment and LTE Base Station powered by Evolved Packet Core functionalities. These solutions have been designed to operate under harsh space environments. As part of this agreement, Nokia will collaborate with a spaceflight engineering company — Intuitive Machines — to ensure seamless supply of 4G/LTE network equipment to the moon. Apart from enhancing lunar communications, the network will enable astronauts to have access to real-time navigation with video streaming capabilities.

The deal aims to augment NASA’s “Tipping Point” technologies, which are specifically designed to advance research and development for space exploration. Apart from 4G, these space-grade technologies include robotics and cryogenic freezing. Apparently, the consolidated amount of this mission is $370 million and NASA has selected 14 companies to deploy these breakthrough technologies on the lunar surface. It is worth mentioning that the space agency intends to incorporate these technologies into its Artemis moon-landing program, which will enable sustainable human presence on the moon in future, while supporting human missions to the Mars.

Equipped with mission-critical capabilities, the ultra-compact and high-performance cellular network provides hassle-free option of self-configuration right after its deployment. The tech behemoth further plans to pursue 5G-backed space applications with extended commercialization of LTE. Lately, NASA has been in the news for its plans to send American astronauts to moon by 2024 as part of the Artemis project. The space journey will mark the presence of the first woman on the moon. The latest partnership is likely to give an extra boost to Nokia’s overall business roadmap, especially at a time when it is facing severe headwinds in the global market. The 4G network is expected to be deployed on the lunar surface in late 2022.

Currently, the equipment vendor is focused on developing its 5G portfolio on the back of its technological prowess. The company is building a strong scalable software business and aims to drive its product roadmaps and cost competitiveness through additional 5G investments in 2020. Nokia is likely to benefit from expanding its business into targeted, high-growth and high-margin vertical markets to address several opportunities beyond its primary markets. Accelerated strategy execution, customer focus and reduced long-term costs are expected to position it as a global leader in the delivery of end-to-end 5G solutions. It is to be seen whether the latest endeavor can boost Nokia’s network expansion strategies.

Some other prominent players in the broader industry are Viasat, Inc. VSAT, Badger Meter, Inc. BMI and Sensata Technologies Holding plc ST.

Viasat delivered a trailing four-quarter positive earnings surprise of 361.3%, on average.

Badger Meter delivered a trailing four-quarter positive earnings surprise of 5.4%, on average.

Sensata delivered a trailing four-quarter positive earnings surprise of 1.2%, on average.

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