Nokia said lower mobile network sales hit business, but highlighted the positive integration with Alcatel-Lucent
Nokia recorded 5.6 billion euros ($6.38 billion) in net sales for the first quarter of 2016, down from 6.1 billion euros in the same quarter last year. In the first quarter, Nokia’s operating profit reached 345 million euros, surging 25% compared to Q1 2015.
Nokia last year successfully acquired French Alcatel-Lucent, adding Alcatel’s wireline portfolio to its wireless products. The combined company began its first day of joint operations on Jan. 14. The acquisiton is valued at $16.5 billion cumulatively, with the new company employing more than 100,000 people globally. It remains headquartered in Finland with strategic business and research and development locations in France, Germany, China and the U.S.
Nokia Networks recorded net sales of 5.18 billion euros in Q1, down 8% compared to 5.66 billion euros in the same quarter the previous year. The unit posted operating profits of 337 million euros in Q1, compared to 209 million euros in the same period the previous year.
Nokia Technologies generated 198 million euros in revenues during the period, compared to 273 million euros in the year-ago quarter.
“Nokia’s first quarter results demonstrate the strategic value of our combination with Alcatel-Lucent,” said Nokia President and CEO Rajeev Suri. “I am pleased that we were able to deliver solid profitability in what is typically a seasonally weak quarter and at a time when the risk of integration-related disruption was high.”
Suri noted the decline in revenues was mainly due to lower sales in the mobile network segment due to challenging market conditions.
“While integrations of the scale of Alcatel-Lucent are complex and take time, we are now sufficiently confident in our progress that we are targeting synergies that are both more than and faster than our original plan,” Suri said. “We already have agreed transition plans that cover the most pressing areas of portfolio overlap with most of our top customers [and] have begun the process of reducing overlapping personnel including initial reductions in the United States and several other countries.”
The Finnish company announced it has started actions to reduce company personnel globally as part of its synergy and transformation program. The headcount reductions are expected to take place between now and the end of 2018.
Nokia, Zain KSA deploy LTE-A technology in Jeddah
In related news, Nokia and Saudi telecom operator Zain KSA announced the deployment of LTE-Advanced three-band carrier aggregation technology designed to support network data speeds of up to 188 megabits per second. The technology was launched in the business and residential districts of Jeddah.
“We’re pleased to support Zain as it puts in place infrastructure that will allow Jeddah to become a smart city. With this project, Zain becomes the first operator in Saudi Arabia to carry out the refarming of spectrum in the 900 MHz band from GSM to LTE, and using three-component carrier aggregation to increase speeds on Zain’s 4G network,” said Ali Aljitawi, head of Zain KSA customer team at Nokia.
Nokia said the project aggregated 25 megahertz of spectrum across the 900 MHz, 1800 MHz and 2.1 GHz bands. Nokia implemented its Flexi Multiradio 10 Base Station and FDD-LTE software.
