After gaining access between Nokia and the French counterpart Alacatel-Lucent following its 15.6-billion ($17 billion) all-share offer, the Finland’s tech said on Monday about the two telecom equipment makers would kick start their operations next week.
Nokia has gained control of nearly 80-percent of Alacatel-Lucent wireless business share and is expected to close in the first half of 2016. The company however needs approval from other regulators (mainly FCC). Following the acquisition, Nokia Corporation will become the second largest mobile equipment manufacturer in the world with an estimated market share of 35% just behind the Swedish counterpart Ericsson – with 40% of the market.
Nevertheless with the Alcatel-Lucent acquistion, it will put Nokia into a stronger position to compete with other telecom giants such as China’s Huawei in the market, where limited growth and strong competition are pressuring prices.
Now that Nokia holding around 76% of shares and voting rights in Alactel under its public exchange offer, the French financial market authority, AMF – said in an interim report. With that in hand, Nokia hopes it will help it become the world’s number one network equipment and service provider and it also helps Nokia to extend from telecom networks to Internet networks and “cloud” services to betterfy compete with its global rivals.
In addition to positioning it among the top big players in the telecom gear market, the acquisition will defenitely help Nokia expand its product portfolio in the domains of optical transmission and Internet Protocol (wireless routers and switches), which essentially needed as components in building a complete network provider.
As Alcatel-Lucent’s small cell technology is becoming popular in the United States, Nokia is also looking to take complete advantage of it’s tecnological prowess and althouh found acceptance among clients including Verizon and AT&T. With this Alactel-Lucent deal, Nokia gets a head start in this arena.
Nokia brought forward the deal’s 900 million euro cost-saving target by a year to 2018.
“They are well on track with this deal, it seems they have calculated the deal’s ‘margins of safety’ rather carefully. Now, they can keep up a positive news flow,” said Jukka Oksaharju, strategist at Nordnet brokerage.
The deal also places Nokia strongly in the global service provider router market, as Alcatel-Lucent holds the second highest market share after Cisco. It’s up to Nokia and Alcatel-Lucent to mix up its technology to regain their positions once again in the market.