Newsletter
If you have been following the news over the last couple of days then you will know that things are happening in the world of Nokia. The company was very widely reported some time ago for selling the phone side of their business to Microsoft. However, the more recent news is them as the buyer and not the seller. The news properly commenced two days ago when it was rumored Nokia was ‘in talks‘ to purchase Alcatel-Lucent. However, those rumors turned to hard facts within twenty-four hours, when reports then emerged the company had announced they had reached an agreement, subject to approval. Well, as is the case with any big-name business purchasing another, the deal is usually subject to analysis and the Nokia/Alcatel-Lucent deal is no different. In fact, analysts over at Analysys Mason has now offered a few reasons as to why this deal could be good for Nokia.
Firstly, Nokia’s purchase of Alcatel-Lucent will give them a much stronger share of the communications market. This is, at an infrastructure, software and service level. Although, maximizing their position will be greatly improved if Nokia can speedily cement the deal. Not to mention, the deal will also offer Nokia greater access to new customers including Tier 1 customers in the U.S., as well as those in China through Alcatel-Lucent Shanghai Bell. While also, offering Nokia the ability to further advance in other newer and key developing markets in Asia and Africa. It is also being suggested that the deal could prove more beneficial for Nokia in other areas due to the portfolio which will be picked up from Alcatel-Lucent, which will include greater network elements such as IP transport network, optical technology and so forth. This increasing in portfolio will better position Nokia to be a more effective competitor in the market. Not to mention, due to the recent upsurge with the ‘internet of things’ (IoT), Nokia are going to be better able to position themselves within the fixed broadband market.
While analysts state that the deal is rather well strategically timed (due to its recent divestments and restructuring) which will result in a much easier combining of portfolios, the analysts also note that due to the length of time it will take to finalize the deal (expected 2016), competitors will remain with an edge in respective markets until then. Not to mention, in spite of increasing and diversifying their portfolio through this acquisition, success will still be defined by how well Nokia can integrate their newly acquired Alcatel-Lucent assets.