Rumor Mill: NSN considers a tie-up with Juniper Networks

Nokia (NYSE:NOK) is thinking of combining its Nokia Solutions and Networks division with Juniper Networks to get a stronger foothold in the U.S. network equipment market, according to a report in Germany's Manager Magazin Online.

The report, which did not cite its sources, said NSN CEO Rajev Suri traveled to the U.S. late last year to discuss the deal with Juniper's management. Juniper has a stock market value of $13.7 billion, which would make the deal a heavy lift for Nokia, but the report said Nokia could use Juniper's $3.1 billion in cash to help make an acquisition happen.

Despite the report, an unnamed source familiar with NSN's strategy told Reuters that no such deal was imminent. Representatives of Nokia, NSN and Juniper declined to comment on the report, Reuters said.

NSN already has an extensive partnership with Juniper, spanning everything from mobile backhaul to site connectivity, LTE transport security, mobile and evolved packet core security and multiservice IP backbones.

Smaller network vendors like Juniper might pursue deals with larger vendors, Reuters noted, since the likes of Ericsson (NASDAQ:ERIC), Huawei, NSN, Alcatel-Lucent (NYSE:ALU) and ZTE can afford to spend more on research and development costs.

Suri is currently being considered for the CEO position of Nokia after the company completes the sale of its handset division to Microsoft (NASDAQ:MSFT), according to a January Bloomberg report. NSN will be the largest division by far within the reshaped Nokia.

NSN was named as one of vendors for Sprint's (NYSE:S) Spark initiative to deploy new radios for its 2.5 GHz LTE service. The deal, announced last fall, represented a huge win for the infrastructure vendor, which secured an LTE partnership with its second Tier 1 U.S. operator and now has TD-LTE contracts on every continent. Along with Ericsson, NSN is one of the primary vendors for T-Mobile US' (NYSE:TMUS) LTE network.

NSN's sales plummeted 22 percent year-over-year sales during the fourth quarter and the company predicted shrinking profit margins going forward. Last month Suri said NSN's addressable market will experience flat to modest growth in the coming years. Accelerating LTE deployments in China, Europe and the Middle East will be balanced by declines in legacy technology, he said.

For more:
- see this Manager Magazin Online article (translated via Google Translate)
- see this Reuters article
- see this Bloomberg article

Related Articles:
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NSN's fourth-quarter sales drop 22%, prompting refocus on growth
NSN's Suri reportedly in the running to head up Nokia
Sprint sparks Nokia's network resurgence
Nokia's network unit reports sales decline, looks ahead to growth
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