Two major European telecom equipment makers are set to merge in a multi-billion dollar deal: Nokia, based in Finland, and Alcatel-Lucent, headquartered in France. These companies have been through a lot in the highly competitive market…
Nokia mobile phones used to be the greatest thing in telecom. I had one that survived being dropped on concrete pavement and driven over by a car. I also have fond memories of its Symbian smartphones, like the E71. Nokia used to have the largest market share of mobile phones, but that business vaporized as it couldn’t keep up with the onslaught of Android and iOS devices. It got so bad that the company had to unload its mobile phone business to Microsoft whose Windows Phone market share remains a distant third place. Microsoft got the assets for relatively cheap, and Nokia got the cash it needed. Now the Finnish company focuses on telecom equipment and infrastructure.
Alcatel-Lucent, on the other hand, started being an equipment manufacturer, merged with the famed Bell Labs, then expanded into the mobile phone business among others (readers will remember it owning then selling Genesys). Its business has seen an upturn in recent years, and its global customer footprint will nicely complement Nokia’s. The long-term benefit to come out of this merger, however, likely resides in the companies’ R&D prowess.
The greatest challenge? Besides the fact that these are two corporate behemoths, the merger deal will be scrutinized by the governments, especially with stricter European labor laws and regulations.