Nokia CEO calls the deal “historic”
Although Nokia and Alcatel-Lucent Shanghai Bell, which manufactures switching, transmission and other telecom network infrastructure, have been operating jointly since January 2016, the integration is targeted for an official close in July.
The new joint venture, called Nokia Shanghai Bell, is described by Nokia as an “exclusive platform in China for the continued development of new technologies in areas like IP routing, optical, fixed and next-generation 5G; and with the support of Nokia, NSB will continue to look for opportunities in select overseas markets.”
Nokia acquired Alcatel-Lucent for $17 billion in 2016. The China-specific deal has to go through legal and regulatory review. Per the terms of the deal, Nokia will own 50% of the joint venture, plus one share, with an investment group called China Huaxin Post & Telecommunication Economy Development Center controlling the remainder.
Nokia President and CEO Rajeev Suri called the agreement “historic…marking the next step of our decades-long commitment to the country and underscoring China’s leading role in developing next-generation communication technologies.” He said the new company “will enhance our ability to innovate, helping us strengthen ties with communication service providers and expand to new, fast-growing sectors in need of high-performing networks.”
Following its acquisition of Alcatel-Lucent, Nokia reorganized a number of key business groups. Further the company began a process of job cutting with the goal of eliminating some $1 billion in operating costs, which could ultimately impact 10,000 to 15,000 positions.
Yuan Xin, genral manager of China Huaxin, Nokia’s partner in the JV, cast the new agreement as bolstering innovation around 5G and IoT. “The successful combination globally and in China brings together the leading E2E network technologies and most powerful innovation engines from both sides. We’re excited to work with Nokia to establish a future-oriented innovative technology company, with a win-win cooperative model for the bigger success in the new era.”
