Nokia Oyj is confirmed to be in talks to buy the Franco-American Alcatel Lucent. The proposal is a bet by two companies to reach to the height of the competitors such as Cisco Systems Inc and Ericsson and also the Asian competitors such as Huawei and Samsung Electronics.
The deal is backed by the French government but could pose challenges in cutting costs. Both the companies made a joint stamens, they said that they were under “advanced discussions” on a “full combination”, which would then transit to public exchange offer by Nokia for Alcatel-Lucent.
Nokia’s agenda is to expand its position in the key market of United States, where Alcatel-Lucent is the main supplier to telecom operators such as AT&T and Verizon. The combination would help Nokia to get its chunk into Alcatel’s profitable and fast-growing Internet routing business.
The Nokia and Alcatel Lucent partnership could result into a powerful proposition, focused upon mobile network generations beyond 5G. The collaboration would bring in consistent integration and roaming between wireless and fixed networks, which would benefit from the huge data and cloud services. Both the firms lost face on mobile production and customer marketing, but, this step might change the game for the two. In order to earn profits and survive in that market, both the companies need to inflict their standards.
As we all know, Nokia has witnessed several ups and downs, the company has undergone many transformations and has also withdrawn itself from various sectors. It once enjoyed a booming mobile business, which is now in the hands of Microsoft and its smartphone focused Symbian operating system has been taken over by Google’s Android. On the other hand, Alcatel Lucent too has gone through strings of transformations, such as giving up the terminals business and moving to networks.