Nokia (NYSE:NOK), through its Nokia Siemens business, offers infrastructure equipment to mobile phone operators like Verizon (NYSE:VZ) and AT&T (NYSE:T) that enable mobile phone communications to reach their destination.

We estimate that Nokia Siemens constitutes about 4% of the $26 Trefis price estimate for Nokia’s stock and that Long Term Evolution (LTE) communication technology can help limit Nokia Siemens market share declines within the wireless infrastructure market.

Long Term Evolution for Faster Mobile Networks

Long Term Evolution (LTE), a new generation of mobile network technology, promises to revolutionize the use of mobile data services.  LTE’s primary objective is to enable mobile operators to better and more cost-effectively transport the rapidly growing volume of mobile IP data traffic on their networks.  Companies like Verizon and AT&T are already leading the way to migrating their networks to LTE technology in the U.S.

More Nokia Siemens LTE Contracts in Q4 2009

Nokia Siemens Network (NSN) continues to show strong progress in LTE. In the last quarter, NSN won major LTE contracts with Telenor Denmark and TeliaSonera. Adding these to the NSN’s growing list of global reference accounts gives NSN the highest number of LTE customers in the industry.  In addition, NSN added ten new 3G customers in Q4 2009, taking their overall customer count to an industry-leading 170.

LTE Can Slow Market Share Declines

We expect Nokia’s share in the wireless infrastructure market to be around 19% in 2010.  We expect the company’s share to decline to around 18% by the end of the Trefis forecast period due to increasing competition from Chinese wireless infrastructure players like Huawei and ZTE.  We believe that Nokia’s LTE technology is limiting its share from declining even further.

Competition from WiMax

In addition to competition from Chinese players, Nokia faces the threat of WiMax technology from Motorola.  Some mobile operators like Sprint are upgrading their networks using WiMax, a competing 4G communication technology.  Motorola is the market leader in supplying WiMax wireless equipment and is the supplier for Sprint.

You can modify our forecast above to see how Nokia’s stock would be impacted if its market share in the wireless infrastructure market were to decrease more than our forecast as a result of increased competition.

For additional analysis and forecasts, here is our complete model for Nokia’s stock.

source:trefis