- Nokia is actively exploring options for its mobile networks business, which may include divestment or selling some or all of its assets.
- The discussions between Nokia and Samsung are still in the early stages, and there is no guarantee that a deal will be finalised.
OUR TAKE
Samsung’s interest in Nokia’s mobile networks assets could be a strategic move to bolster its position in the telecommunications infrastructure market, particularly in radio access networks. This development comes as Nokia faces declining profitability in its mobile networks division, partly due to weaker demand for 5G equipment.
-Lia XU, BTW reporter
What happened
Recently, Nokia has been exploring options for its mobile networks business. This includes considering a divestment or selling some or all of its assets. The company is facing challenges, particularly a significant 32% drop in operating profit due to weak demand for 5G telecom equipment, prompting this strategic reassessment. Samsung has expressed interest in acquiring some of Nokia’s mobile networks assets. This move is part of Samsung’s strategy to enhance its scale in the radio access networks that connect mobile phones to telecom infrastructure.
With Nokia reportedly exploring options including a potential divestment or partnership, the valuation of up to $10 billion highlights the significance of this business segment. The talks are still early, and neither company has confirmed any specific details or outcomes. Samsung’s bid could be part of a broader strategy to consolidate its market position, given its leading role in memory chips, smartphones, and TVs.
Also read: Samsung SDI and GM to build a $3.5B EV battery plant in US
Also read: South Korea’s Samsung union plans strike to demand higher wages
Why it’s important
For Samsung, acquiring part of Nokia’s mobile networks could enhance its competitive edge and expand its footprint in this critical area of telecom infrastructure. By potentially combining resources, both companies could enhance their capabilities in radio access networks, which are vital for mobile connectivity. This collaboration could lead to improved technology and services for consumers. For Nokia, the potential sale of Nokia’s mobile networks business, valued at approximately $10 billion, could provide a much-needed financial boost. This capital could be reinvested into more profitable areas or used to innovate within the company, helping to stabilise its financial health in a challenging market.
The discussions between Nokia and Samsung reflect broader industry dynamics where companies are constantly seeking to adapt to changing market conditions. As telecom infrastructure evolves, companies must reassess their strategies to remain relevant and competitive in a rapidly changing environment. The outcome of these discussions could shape the future growth trajectories of both Nokia and Samsung.
