Nokia Corporation's shares climbed 3.37% in Helsinki trading on Wednesday, reaching €11.98 by 16:17 EEST, following a key regulatory development. The company announced late Monday that the U.S. Federal Communications Commission's Public Safety and Homeland Security Bureau had conditionally cleared its Beacons and optical network terminal (ONT) devices, including future iterations, from the Covered List restrictions. The Covered List identifies equipment deemed a national security risk, and this exemption removes a significant procurement obstacle for U.S. broadband operators using Nokia's in-home fiber connectivity hardware.
Regulatory Clarity Boosts Broadband Operations
Sandy Motley, President of Nokia Fixed Networks, emphasized that the FCC's decision allows customers to continue deploying devices "without disruption." Jeff Heynen of Dell'Oro Group noted that this places Nokia in "a strong position" within the U.S. broadband market. While the approval does not guarantee new contracts, it alleviates a major compliance headache for service providers, enabling smoother rollout of fiber-to-the-home solutions.
In a separate stock exchange release at 17:00 EEST, Nokia disclosed the transfer of 975,289 treasury shares to participants in its equity-based incentive plans. These shares were issued without consideration, meaning recipients paid nothing. Following this transfer, Nokia holds 132,353,333 own shares.
AI and Optical Networking Drive Growth
Nokia's market rerating remains heavily tied to its network infrastructure segment. In April, the company reported first-quarter net sales of €4.5 billion, with sales to AI and cloud customers surging 49%. Nokia also raised its 2026 Network Infrastructure growth target to 12%-14%. CEO Justin Hotard indicated that the company is tracking "above the mid-point" of its full-year comparable operating profit outlook, excluding restructuring costs and acquisitions.
The optical transport equipment market is expected to see a significant uptick in 2026. Dell'Oro Group forecast on Tuesday that the market will grow 16% that year, surpassing $18 billion in revenue, driven by the expansion of AI data centers. Optical transport refers to the fiber-optic gear used to move massive data volumes between networks. Jimmy Yu, Vice President at Dell'Oro, cautioned that supply constraints could be the primary factor limiting growth this year.
Competitive Landscape and Risks
Dell'Oro's 2025 market review identified Huawei, Ciena, Nokia, ZTE, and Cisco as leaders in optical transport systems. In the data center interconnect (DCI) segment, which connects data centers via high-capacity fiber, Ciena, Nokia, and Cisco held top positions.
Despite the positive developments, risks persist. The FCC's conditional approval for Nokia's Beacons, ONT-based Beacons, and Fastmile Gateway routers expires on October 31, 2027. Any tightening of U.S. security regulations, manufacturing delays, or changes in customer purchasing patterns could push back deployments. Nokia's U.S. broadband outlook appears clearer for now, with robust optical networking demand supporting the market. The next focus will be on translating regulatory approvals, AI deals, and supply chain dynamics into tangible margin improvements, while managing expectations around deliverable results.
