My Thoughts on Technology and Jamaica: @Nokia’s purchase of @Alcatel_Lucent - How No. 2 Crouching Swedish-French Telecoms Alliance Tiger will challenge Chinese @Huawei Dragon and Finnish @Ericsson

Sunday, June 7, 2015

@Nokia’s purchase of @Alcatel_Lucent - How No. 2 Crouching Swedish-French Telecoms Alliance Tiger will challenge Chinese @Huawei Dragon and Finnish @Ericsson

“The combined company will be uniquely positioned to create the foundation of seamless connectivity for people and things wherever they are. This foundation is essential for enabling the next wave of technological change, including the Internet of Things and transition to the cloud. With more than 40,000 R&D employees and spend of €4.7 billion in R&D in 2014, the combined  company will be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud, analytics as well as sensors and imaging”

Press Release by Nokia on Wednesday April 15th 2015 announcing their intention to purchase Telecom Equiptment Provider Alcatel-Lucent

Looks like Nokia's ambitions to become a Telecom Equiptment Provider are finally being realized!

On Wednesday April 15th 2015, Helsinki, Finland-based Nokia announced their intention to purchase French Telecom Equiptment Provider Alcatel-Lucent for some US$16.6 billion (EU 15.6 billion)  dollars as reported in the article “Nokia agrees to buy Alcatel-Lucent for $16.6 billion”, published April 15, 2015 By Sam Byford, The Verge.

The deal will involve Nokia buying every outstanding Alcatel-Lucent share for 0.55 per share of Nokia stock as reported in the article “Nokia agrees to buy Alcatel-Lucent”, published April 15, 2015, Wall Street Journal. This will result in a merged company still called Nokia and composed as follows:

1.      64.5% Nokia
2.      35.5% Alcatel-Lucent

Nokia’s purchase by the Numbers – No. 2 OEM Growing Strong to take on Ericsson and Huawei globally

This purchase marks Nokia's push into the Telecom Equiptment Provider arena, particularly for major AT&T and Verizon contracts in the USA, where they will compete with Ericsson for those contracts.

After this merger they are now ranked as No. 2 in the Global Telecoms Equiptment Supplier game after Helsinki, Finland based Telecom Equiptment Provider Ericsson as pointed out in the article “Nokia Buys Alcatel-Lucent For $16.6 Billion”, published 4/15/2015 by Parmy Olson, Forbes.

Nokia President and CEO Rajeev Suri is apparently super upbeat on the timely announcement, especially as they're acquired some of the same technical know-how long associated with the legendary Bell Labs, quote: “Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale”.

It also creates possibly the largest European counterweight to the growing power of Telecom Equiptment Suppliers Ericsson and China-based Huawei, No. 1 and 2 as noted in the article “Nokia buys Alcatel to take on Ericsson in telecom equipment” published Wednesday Apr 15, 2015 BY JUSSI  ROSENDAHL AND LEILA ABBOUD, Reuters.

The combined company now sports some impressive numbers:

1.      114,000 employees
2.      26 billion euros in Alcatel-Lucent sales
3.      40,000 R&D employees
4.      6000 Alcatel-Lucent Employees in France
5.      6900 Nokia Employees in Finland

The purchase also bumps them up to No. 2 in the world in terms of Telecom Equiptment Providers behind Huawei in terms of Global marketshare:

1.      40% to Ericsson
2.      35% to Nokia-Alcatel-Lucent
3.      20% Huawei

Nokia’s decision has been anticipated since 2013 has also saved this French company which was struggling to find their form against these two (2) juggernauts a noted in the article “Nokia agrees to buy Alcatel-Lucent”, published April 15, 2015, Wall Street Journal.

Nokia has promised to save French Telecom Jobs and possibly even add some five hundred (500) to their total as they gear up to take on Ericsson and Huawei globally. Truly, Nokia is on the road to recovery.

Nokia’s purchase of Alcatel-Lucent - Crunching Swedish-French Telecoms Alliance Tiger to challenge Chinese Huawei Dragon

Nokia has already sold their smartphone Hardware division to Microsoft for US$7.2 billion dollars almost a year ago in April 2014 as reported in the article “Microsoft closes Nokia deal, pays more than expected”, published 25 April 2014 12:07 pm BST by Rich Trenholm, CNET News.

Already Microsoft is launching an onslaught of low-cost low-end and high-end feature and smartphones, such as the US$29 Nokia 215 on the emerging market of India and China as chronicled in my blog article entitled “US$29 Nokia 215 by Microsoft - How Microsoft's Nokia Mobile division will conquer India and Developing World Countries”. 

Now having shed that weight, they've taken on a new challenge that has a little weight added to it in the form of Alcatel-Lucent fledgling smartphone division.

Good to note here that Alcatel-Lucent is NOT the OEM (Original Equiptment Manufacturer) of the DL600, DL700, DL750 and DL900 smartphones that Telecom Provider Digicel sells in Jamaica as noted in the Geezam blog article entitled “Digicel launches DL900 aka Alcatel Pop C7 as Digicel DL750 on Sale for Christmas 2014”. 

Those are Alcatel OneTouch smartphones and are made by a Chinese company called TCL Corporation. They are in no way connected to Alcatel-Lucent or Nokia!

Nokia’s True Ambition – Conquer the Huawei Dragon in China and overtake Ericsson in Finland

Nokia's purchase of Alcatel-Lucent isn't geared solely towards competing against Ericsson.

Rather, Nokia is gearing up to compete with Ericsson and Huawei on a global scale as well as in their own respective backyards  as explained in the article “Nokia to buy Alcatel-Lucent for $16.6B, eyeing global market”, published April 15, 2015 by Claire Reilly, CNET News.

5G, which is closely related to 4G LTE Advanced, is already being tested by Huawei and Telecom Provider EE in London, England since October 2014 as explained in my blog article entitled “Huawei’s 4G LTE Advanced Test – How Quad-Band Qualcomm Snapdragon 810 on EE's Network achieved 410MBps Download via inefficient Spectrum Aggregation”.

Armed with such a large technical army means they can potentially go after Huawei in China, India as well as South and East Asia to quote Alcatel-Lucent CEO Michel Combes, who commented on the deal as thus:  “This transaction comes at the right time to strengthen the European technology industry. We believe our customers will benefit from our improved innovation capability and incomparable R&D engine under the Bell Labs brand. The global scale and footprint of the new company will reinforce its presence in the United States and China”.

With the purchase giving Nokia such a huge advantage in the Telecom Equiptment Provider game, Nokia is perfectly poised to leapfrog directly into becoming suppliers of 4G LTE (Long Term Evolution) and the still evolving 5G Platforms.

Here’s the link:

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