Bloomberg reported this week that Samsung is interested in acquiring Nokia’s mobile networks business
On Aug. 29 Bloomberg, citing “people with knowledge of the matter,” reported that Nokia is exploring a divestiture of its mobile networks business with Samsung emerging as a potential buyer. In response to market activity seemingly related to this announcement, Nokia released a comment “on trading activity of its stock.”
Per the Finnish firm: “Nokia is issuing this stock exchange release in response to the recent trading activity of its stock due to a market rumour. Nokia has nothing to announce in relation to the speculations published in an article today, and no related insider project exists.
“Nokia is committed to the success of its Mobile Networks business, a highly strategic asset for both Nokia and its customers. The business has made significant progress this year both on right-sizing its cost-base while protecting its product roadmap and winning new deals with new customers and increasing share with existing customers. Nokia is focused on ensuring that Mobile Networks is positioned to serve its customers building the best performing networks, investing in its portfolio and creating value for Nokia’s shareholders.”
Nokia’s mobile networks business has been dealt some material setbacks in recent years, particularly in North America with the loss of business at both Verizon (to Samsung) and AT&T, which has gone all in with Ericsson for a five-year network modernization program.
The global RAN market in general is in decline with many major operators having already completed their initial rollouts of 5G and activation of spectrum to support the latest generation of cellular; there has been limited return on those investments as operators by and large have come up short on leveraging 5G to generate new service revenues from advanced enterprise-facing services.
There’s an Open RAN angle here too. Both Nokia and Samsung have been proponents of the technology. However, one of the conceptual drivers of Open RAN is that open interfaces between RAN components would foster more competition in what was already a highly-consolidated market. Rather than a rise of specialists, though, we’ve seen AT&T opt to go with what’s been described as “single-vendor Open RAN” via the Ericsson deal. The next major wave of Open RAN investment is set to come from major European operators, including Deutsche Telekom, Orange, Telefonica, TIM and Vodafone.
