As soon as the deal with Microsoft is completed, Nokia will be looking for other markets for growth. Aside from its HERE maps and location-based services, the Finns still get to operate Nokia Solutions and Networks (former Nokia-Siemens). That business has been losing money in the past, but with the fresh cash coming from Redmond, Nokia will likely try to turn NSN into a profit-making venture.
According to a Mobile World Live report, the Finnish company may look into acquiring one of its rivals, namely Alcatel-Lucent which too had tough time competing with the market leader Ericsson and the ever-growing Huawei.
Analysts, cited by Reuters, value Alcatel-Lucent’s wireless business at anywhere between 1.1 and 1.5 billion EUR. Nokia definitely has that cash and if this deal goes through, it could create the second largest network infrastructure company, with a market share behind Ericsson’s 36% and slightly ahead of Huawei’s 32%.
Of course, other companies may also be interested into scooping the French-American assets though these could face regulatory hurdles. Presuming the deal materializes, Nokia will also get a large chunk (45%) of the U.S. market; in comparison, Ericsson currently commands a half of that market.
But there are roadblocks ahead. For one thing, French government, which owns 3.6% of Alcatel-Lucent, may not like this market consolidation as it will likely produce layoffs in France. Then again, their voting power may not be significant enough to stop the deal but will likely deserve a spot on Nokia’s agenda when pitching the idea to various stakeholders. We’ll see where this goes and whether Nokia could find its fortune (and future) as a leading network infrastructure provider…
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