Samsung is reportedly interested in acquiring mobile network assets of Nokia. The telecom equipment arm of the Finnish company could be valued at around $10 billion.
Why is Nokia willing to sell its mobile network equipment?
Nokia Oyj is the telecom equipment manufacturing and supply arm of Nokia. The Finnish company is reportedly contemplating multiple financial strategies, and divestment is one of them.
Nokia Oyj has been struggling to compete with larger Chinese telecom equipment manufacturers such as Huawei. The company’s second-quarter operating profit reportedly dropped 32% due to weak demand for 5G telecom equipment.
Report from Bloomberg:
Samsung’s mission to acquire the mobile phone network sector from Nokia for $10 billion 📱
Nokia is one of the largest companies in the field of telecommunications towers and networks and has been competing with large companies in this field such as… pic.twitter.com/DTtRqIK0wR
— iPLUG NG 🇳🇬 (@iplugsupport) August 30, 2024
Mobile World Live (MWL) quoted a Nokia representative saying the company does not comment on rumors and speculation. However, the representative mentioned the company is “committed to the success of its Mobile Networks business, a highly strategic asset” for the company and its customers.
“The business has made significant progress this year both on right-sizing its cost base while protecting our product roadmap, and winning new deals with new customers and increasing share with existing customers”.
Nokia’s representative added the vendor is “focused on ensuring that Mobile Networks is positioned to serve its customers” by providing the “best-performing networks, investing in its portfolio and creating value” for shareholders.
Why does Samsung want to acquire Nokia assets?
Samsung is reportedly one of the leading companies that has expressed interest in acquiring Nokia assets. There could be other companies who may initiate discussions too.
Samsung hasn’t officially issued an Expression of Interest (EOI) to Nokia Oyj to acquire the latter’s assets. According to Bloomberg, the deliberations are at an early stage. Simply put, there’s no assurance Nokia will sell its assets. However, the entire telecom equipment arm of Nokia could be valued close to $10 billion.
Samsung takeover of Nokia mobile would show futility of open RAN.
Samsung is reportedly in talks about a takeover of Nokia’s mobile assets, valued at $10 billion, that would lessen competition and make it bigger than Ericsson pic.twitter.com/DBWa6sPYgX
— Stranger (@Stranger4every1) August 30, 2024
Samsung may have expressed interest in acquiring some Nokia assets presumably because of the size and nature of the business. The telecom equipment manufacturing business is heavily consolidated with a few market leaders.
With Samsung’s deep pockets and global reach, the South Korean tech giant could grow Nokia’s business arm. Moreover, Nokia’s radio access networks help connect mobile phones to telecom infrastructure. This alone would significantly benefit Samsung’s mobile business.
Nokia’s mobile networks division supplies base stations, radio technology, and servers. Its primary customers are wireless operators around the world. Interestingly, this division contributed about 44% of Nokia’s total revenue last year, making it the company’s largest segment.
2024-08-31 15:08:11