Nokia and Alcatel-Lucent employees step into a new telecom world

Nokia India Innovation Day
More than 104,000 employees at rival telecom network vendors Nokia and Alcatel-Lucent will have a new day on Thursday.

When Microsoft acquired the phone division of Nokia, job cut became the main news following the $7 billion strategic divestment of device business. When Nokia Networks acquired Motorola networks division, several employees lost their job.

Today Alcatel-Lucent and Nokia employees started celebrating their first day of combined operations, marking the completion of Nokia’s latest transformation. From today, they will not compete each other in the global telecom market place. Their three main rivals will be Ericsson, Huawei and ZTE.

The combination of Nokia and Alcatel-Lucent is aimed at creating a global leader in technology and services for an IP connected world.

The combined company will have 104,000 employees and five business groups: Mobile Networks, Fixed Networks, IP/Optical Networks, Applications & Analytics and Nokia Technologies.

Top Nokia team
Rajeev Suri, CEO of Nokia
Samih Elhage, president of Mobile Networks
Federico Guillen, president of Fixed Networks
Bhaskar Gorti, president of Applications & Analytics
Basil Alwan, president of IP/Optical Networks
Ashish Chowdhary, chief customer operations officer (CCOO), Nokia
Marc Rouanne, chief innovation and operating officer (CIOO), Nokia
Kathrin Buvac, chief strategy officer (CSO), Nokia
Barry French, CMO, Nokia

Nokia has 40,000 R&D professionals, a combined pro forma R&D spend of EUR 4.2 billion in 2014.

Nokia will be betting on the R&D history of Bell Labs, creating around 31,000 patent families.

The addressable market of the combined company in 2014 was approximately 50 percent larger than the addressable networks market for Nokia alone – increasing to approximately EUR 130 billion from some EUR 84 billion – with an estimated CAGR of approximately 3.5 percent for 2014-2019.

On a 2014 pro forma basis, the combined company would have had net sales of EUR 24.7 billion and a non-IFRS operating profit of EUR 2.3 billion; as of June 30, 2015, pro forma combined net cash stood at EUR 8.1 billion.

Nokia currently holds 80 percent equity stake in Alcatel-Lucent. Last year, Nokia announced its $17 billion acquisition. Several telecom analysts questioned the capability of Nokia to retain the client base and revenue of Alcatel-Lucent post acquisition.

Rajeev Suri, president and CEO of Nokia, said: “Combining with Alcatel-Lucent comes at the right time: we can align our product and technology roadmaps for the next generation of network technology at the outset, allowing us to take full advantage of the coming opportunities and better serve customers including communication service providers, governments, internet players and large enterprises.”

Earlier, Nokia sold its Devices business to Microsoft. It also sold the HERE mapping business to a consortium of automobile companies.

Nokia is now a business focused on network equipment and wireless technology. The telecom network industry is facing marginal growth in sales — primarily due to telecom operators’ eagerness to focus less on Capex driven strategy. Several telecoms are facing huge spectrum outgo and hence spend less on networks. But mobile Internet will force telecoms to look for investment.

Baburajan K
editor@telecomlead.com