The dawn of the new Nokia
It's the day we've all been waiting for -- well, some of us, at least: the "new" Nokia is set to start operations on Thursday this week, completing the merger with Alcatel-Lucent and launching combined products and services onto the market.
Earlier this week the company announced the final line up for its board of directors and group leadership teams. Some details still remain under wraps, such as the future role that will be played by Hossein Moiin, Nokia's current CTO. All should be revealed on Thursday.
It has certainly been a protracted process. Nokia first announced in April last year that it was to buy Alcatel-Lucent in a deal that valued the France-based company at €15.6 billion ($16.8 billion) and would create a new European powerhouse in the telecoms equipment market. Key EU approval was then secured in July.
In addition to creating a new European equipment powerhouse, the move places both companies in a stronger position to compete with market leader Ericsson and Chinese rivals Huawei and ZTE. Based on 2014 figures, the merged company had combined revenue of around €25.9 billion and a reported operating profit of €0.3 billion. Ericsson, in contrast, generated SEK228 billion (€24.6 billion/$26.6 billion) in revenue and SEK16.8 billion in operating profit during 2014, while Huawei earned CNY288 billion (€40.4 billion/$43.8 billion) and CNY27.8 billion respectively.
Nokia CEO Rajeev Suri said the company would begin offering a combined, end-to-end, portfolio of network infrastructure from Jan. 14 that would have "the scope and scale to meet the needs of our global customers." Indeed, the two companies are merging largely in response to the consolidation and convergence among their key customers: the telecoms operators.
However, as FierceWireless:Europe columnist Keith Mallinson said last year, Nokia's integration of Alcatel-Lucent following the acquisition of its rival will be difficult and messy. Some significant rewards will take many years to achieve, if ever, Mallinson added.
Nokia is certainly not new to the concept of reinvention. Some see the merger with Alcatel-Lucent as a matter of survival for both companies. The challenge will be to seek growth and ensure that this merger goes down in history as one of industry's successes.--Anne