With the Nokia handset business being acquired by Microsoft for $7.2 billion and the final acquisition processes underway, what remains of Nokia is already looking to the future. It is moving on and top on the list of moving on according to insiders is the merger with a key rival in the network infrastructure business: Alcatel-Lucent.
Nokia is in the network infrastructure business thanks to its NSN (Nokia Solutions and Networks) which rakes in at least $18 billion per year and is expected to be Nokia’s biggest profit earner, catering for upto 90% of the company’s revenues going forward now that Nokia’s handset division is gone.
Nokia took complete charge of NSN after buying the share of its German partner, Siemens last year and is now banking on network infrastructure for sustainability. A merger with Alcatel-Lucent is deemed crucial since the company is much stronger than NSN in North America. Being strong in the North American market is important because the other large competitors of NSN and Alcatel-Lucent, Chinese companies Huawei and ZTE have been banned from supplying network infrastructure equipment to American and Canadian firms for fear of spying from the East. In the event of a merger the two will have to face-off with Ericsson which is so strong. There’s also Juniper Networks.
Source: Bloomberg
