Nokia mum on rumors of asset sales, merger talks

Nokia’s challenges have been widely reported, but it's not commenting on reports that it might be considering certain asset sales. (FierceWireless)

Is Nokia is exploring strategic options and working with advisers to consider potential asset sales or some kind of merger? According to a Bloomberg News report, it is, but Reuters countered that, citing a source close to the Finnish company who denied that’s going on.

Nokia declined to comment, telling Fierce that it doesn’t comment on speculation.   

The Bloomberg report suggested one possibility Nokia could consider is combining with a competitor like Swedish rival Ericsson or partnering in certain business areas. However, the report didn’t cite any specific discussions between the two, and noted that such a move would face significant hurdles, including political pressure to preserve jobs as well as antitrust scrutiny.  

Nokia’s shares, trading in the $4 range, rose right after the Bloomberg report but have since settled down.

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Nokia’s challenges have been widely reported, with its stock having tanked in 2019. During the company’s fourth quarter conference call, CEO Raveej Suri reiterated that the company faced challenges with high radio product costs in the early stages of 5G, among other things. He said there's typically about a six-month lag when a new cost optimized product is shipped and when it starts to impact the financials.  

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Nokia finalized its acquisition of Alcatel-Lucent in 2016, and while that enables Nokia to claim an end-to-end solution portfolio, it also weighed on its momentum. In late 2018, the company announced an organizational restructuring and planned to accelerate progress in strategic growth areas.

This week, in the spirit of the Mobile World Congress week that wasn’t, Nokia has been forging ahead on the network news front, announcing that it’s gearing up to offer end-to-end network slicing capabilities for 4G LTE and 5G New Radio (NR) this summer. It’s also talking about how it will operate Rakuten Mobile’s virtualized core network.