Nokia: Yes, we're chatting up Alcatel-Lucent

anal.com

You could be onto something, the domain anal.com is for sale.

"Alca-Lu made posted sales of €13.2bn (£9.5bn) for its full-year 2014. Nokia’s full year 2014 net sales of €12.7bn (£9.2bn).

However, Alca-Lu recorded a net loss of €83m (£60m). Nokia’s operating profit was €170m (£123m) in 2014."

Rather more importantly, Nokia has a much larger market capitalisation...

Much as it would be funny to come up with ANAL as the acronym for the "new" company. it will be "Nokia", it's a buy out proposal, not a merger. Just like what happened when they bought Motorola Networks ( when they were Nokia-Siemens Networks), there was no change in the name. There was even a person that asked about that in the townhall meeting when they told us about changes to expect, to a few titters.

The typical behaviour is to try and EOL the subservient company's (ALU) kit and port it (or the RAN side of it) onto the parent company kit - i.e. connect all the ALU base stations to NOK RNCs (for 3G) and MME/SGWs for 4G, then throw away the ALU RNCs & MME/SGWs and other ancillary equipment like the OSS. I can well imagine that there is a project underway in the background investigating how this can be achieved with the minimum of fuss & outage.

This deal is all about the contracts that ALU have in place - ALU get the bulk of their sales from AT&T and other N. America operators, which is a nice high margin market. But I have to wonder what will happen to those contracts now that it will be NOK rather than ALU proposing the deal. It will boil down to how happy customers are to swap out ALU kit in favour of NOK kit, as well as no longer being able to buy additional ALU kit (I'm not offering any judgement on the comparative worth of each), plus whether NOK can fulfil any roadmap promises that ALU may have made in getting their contracts. I'd expect the ALU side of the sales will take a hit as a consequence of the deal, though.

As an added quirk to the deal, ALU have done lots of restructuring which meant the closure of several sites (including UK ones). Lots of job functions moved to Paris, and French jobs are very hard to cull - I'd expect a few strikes, soon, when NOK start making noises about "cost synergies and optimisation". Expect mass cull excepting a few senior network design/architects, who will be supported by a hastily trained outsourced team in India/Vietnam/China to do bug fixes on the s/w (my guess would be Aricent in India, if their price is right).

No, they won't. The handset division of Alcatel has been sold of long time ago to TCL, but TCL are still allowed to use the brandname Alcatel on the phones (and presumably pay for it).

Absolutely not. Alcatel-Lucent doesn't produce any mobile telephone. That is done by Alcatel Mobile Phones, a joint venture with TCL (a Chinese company). Alcatel sold its shares to TCL a long time ago.

Re: Have Alcatel ever made a profit?

9 years actually (2006), but your point still holds.

Re: Have Alcatel ever made a profit?

The merger is from 2006, so not even 10 years ago... But otherwise entirely true.