Nokia Strengthens Network Automation Portfolio with HPE Licensing Deal

Strategic Collaboration for AI-Driven Networking

Nokia Corp. announced a global licensing agreement with Hewlett Packard Enterprise Co. (HPE), designed to bolster its AI-powered radio access network (RAN) automation capabilities. This strategic move aims to strengthen Nokia's MantaRay Service Management and Orchestration (SMO) platform and expand its offerings in AI-driven RAN automation and autonomous networking. The collaboration includes the integration of HPE's RAN Intelligent Controller (RIC) with Nokia's MantaRay AI-Powered SMO and Network Automation technologies. A significant portion of the development team associated with these HPE assets will transition to Nokia Mobile Networks, effective October 1.

Transaction Details and Operational Impact

The core of the agreement involves Nokia licensing technology assets from HPE, specifically the RAN Intelligent Controller. This integration is intended to enhance the efficiency with which Nokia's customers manage multi-vendor networks, preparing for the evolving landscape from 5G to 6G. The transfer of HPE's development team, largely originating from Juniper Networks' RIC research unit, provides Nokia with valuable expertise and accelerates its development efforts in advanced RAN automation.

While the financial terms of this licensing deal were not disclosed by either Nokia or HPE, the transaction appears focused on intellectual property and human capital acquisition rather than a direct business unit purchase. This aligns with Nokia's strategy to bolster its technological foundation in critical areas without a significant capital outlay often associated with larger acquisitions.

Market Implications and Company Positioning

For Nokia, this agreement is a strategic enhancement to its competitive position in the telecommunications infrastructure sector. The MantaRay SMO platform is already recognized for its AI-driven RAN automation capabilities, achieving TM Forum's autonomous networks level 4 and being fully Open RAN compliant. Integrating HPE's RIC assets further solidifies Nokia's offerings, enabling it to provide more comprehensive solutions for network management and orchestration.

Tommi Uitto, President of Mobile Networks at Nokia, commented on the deal:

"This licensing deal with HPE will further strengthen our proven MantaRay SMO portfolio by adding these assets and expertise. Our customers worldwide will benefit from the enhanced capabilities of Nokia's AI-driven automation, orchestration and open ecosystems, enabling them to manage multi-vendor networks more efficiently and prepare for the transition from 5G to 6G."

For HPE, the licensing agreement and the transfer of the RIC development team represents a strategic divestiture. This move follows HPE's recent $14 billion acquisition of Juniper Networks, from which the RIC technology and team originate. HPE's long-term strategy involves transforming into a "networking-first company" and accelerating AI-driven innovation within its Aruba networking portfolio. The divestment suggests a focus on other core areas and a re-evaluation of the strategic fit of certain Open RAN components, a trend observed with other market players.

Financial Context and Broader Sector Trends

The telecommunications infrastructure sector is witnessing increasing consolidation and a heightened focus on AI and automation. Nokia's investment underscores the growing importance of Open RAN architectures and robust SMO and RIC platforms for future network operations.

Nokia Oyj stock (NOKIA.FI0009000681) traded at 4.115 EUR as of October 2, 2025, reflecting a +0.41% daily change and a +3.10% increase over the preceding five days. Its year-to-date performance showed a -3.52% change.

Hewlett Packard Enterprise Co. (HPE), with a market capitalization of approximately $32.89 billion, reported trailing twelve-month revenue of $33.08 billion. The company's 3-year revenue growth rate stands at a modest 2.6%. Profitability metrics include an operating margin of 6.15% and a net margin of 3.77%. HPE's balance sheet indicates a debt-to-equity ratio of 0.97, though a current ratio of 0.95 and quick ratio of 0.69 highlight potential liquidity constraints.

Valuation metrics for HPE suggest a mixed outlook. The P/E ratio of 30.4 is near its 3-year high, and the P/S ratio of 1.04 and P/B ratio of 1.35 are also close to historical highs, suggesting potential overvaluation. Analyst sentiment is cautiously optimistic, with a recommendation score of 2.2, indicating a moderate buy. Technical indicators, such as an RSI of 63.66, suggest the stock is approaching overbought territory. HPE's beta of 1.55 indicates higher volatility compared to the broader market, and its Altman Z-Score points to financial distress. Insider selling of 543,738 shares over the past three months also signals caution among company insiders.

Outlook

The agreement positions Nokia to compete more effectively in the evolving telecommunications landscape, particularly as the industry progresses towards 6G. The focus on AI-driven automation and enhanced network management capabilities is critical for operators handling increasingly complex, multi-vendor networks. For HPE, this strategic divestment allows for a concentrated focus on its "networking-first" strategy post-Juniper acquisition. The broader market will likely continue to see strategic partnerships and consolidations as companies vie for leadership in the next generation of network infrastructure.