Nokia and alcatel-lucent “bulk”, after the integration challenges and opportunities coexist

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has been indestructible nokia, in its 150 anniversary, for yourself with a super luxury birthday gift.

on April 15, nokia announced a 15.6 billion euros offer to buy the French telecommunications network equipment maker alcatel lucent (hereinafter referred to as this one). Their joint in nokia CEO Suri (Rajeev thought) seems to be “in the long run will lead the next generation IP interconnection technology and service innovation in the world, to create good conditions for the next round of technological changes, for the life of people to build global seamless connectivity… And through technical complementary advantages of both sides, will form a more comprehensive portfolio of products, and then for the upcoming iot operation and lay a foundation to the evolution of the cloud. In the current will also take part in strengthening the business ability, both in the world and let it in the United States and China will get a lead.”

According to

according to the terms of the deal, the deal is expected to be completed in the first half of 2016 at the earliest. The two companies after the merger, “nokia” will be unified as a new company name brand, will be headquartered in Finland. And has a sizable business in France. Combined company will have forty thousand r&d personnel, in addition, the combined company will focus on the alcatel lucent, bell LABS, nokia FutureWorks and nokia the three advantages of technology companies. Combination of 5 g technology, IP, software defined network, cloud technology, data analysis and the development of sensing and imaging technology. And the three companies are operating as an independent subject, and has clear technology licensing business and new technology research and development goals.

and other trading points include: 1, according to the plan, Reese billiton (Risto Siilasmaa) will serve as chairman of the board of directors of the company, Suri (Rajeev thought) will serve as the company’s chief executive officer; 2, the board of directors of the merged company proposed 9 or 10 directors, including three members from alcatel-lucent, and one of them served as vice chairman of the board of directors; 3, such as transactions completed in the first half of 2016, the combined company is expected to be at the end of 2019, achieve the goal of operating cost synergies of 900 million euros; 4, the combined company is expected to cut interest payments of 200 million euros in 2017 at the end of the goal; The deal, according to the international accounting standards (IFRS) program for nokia 2017 revenue from value-added effect (excluding restructuring fees and amortization of intangible assets). [note: the above terms information from phoenix technologies, including content changes slightly.]

about nokia will buy this one actually rumours have been floating in the industry for a long time. As rumors prepared to sell HERE in recent days about the nokia maps and reached a new high tide. People in a to look at the nokia and alcatel-lucent “gossip”. This time, the rumor was finally filled, nokia quick, issued offer to this one, they finally walk together. The merger will bring change, at the same time also will face the challenge.

combined change:

on change, the merger of both. First one of the most intuitive impact is the ranking of global telecom giant will reorder. Will be made by the original Ericsson, huawei, strong into 5, alcatel-lucent, nokia, Ericsson, nokia (combined), huawei, zte four. Combined nokia’s global market share lead over huawei wireless devices, after Ericsson, become the world’s second largest telecommunications network equipment suppliers. And with this one’s lead in the United States, to further break into the American market, nokia for Verizon and AT& T such a large telecom operators to provide equipment. This will greatly expand the nokia’s business in the us market, and in emerging markets, the combined nokia will also further enhance the market competitiveness.

second, the two merged, will make the original nokia’s wireless business from this one IP is relatively single, fixed network access, transfer, and other business, the business expand from wireless to IP, fixed network access, transmission, cloud computing, etc. Thus the LTE construction by the climax gradually into the stationary phase saturation, the wireless market growth slow down under the big background. Find more sales channels, to gain more market breakthrough. Let them have more time to wait for the awakening of demand from emerging markets and the coming of the next wave of technological revolution.

integration challenges:

despite the visible change, but the essence of the two merged, more is in the current communication network market growth is slowing, unprecedented fierce competition under the background of bulk.

in the network market, nokia and alcatel-lucent before merger, both are not the leader of the market, the market by Ericsson and huawei firmly occupy the leading and the position of the second, nokia and alcatel-lucent separate market share is obviously lagged behind the Ericsson and huawei. On the cost advantages and technological advantages, nokia and alcatel-lucent is not ahead of Ericsson and huawei. And the merger of both created a new giant, will be able to better compete in the market with huawei and Ericsson. So the merger is more in the current communication network market growth is slowing, unprecedented fierce competition under the background of bulk.

but the bulk success, depends on whether the two in the merged to convert their size advantage to synergies, has fundamentally changed. To produce this simple change the key point is that nokia’s integration ability, but the integration difficulty is obvious.

is the first enterprise culture and system management: the new nokia, from generally speaking is composed by four companies – the original nokia communication by nokia and Siemens to integrate the two companies in 2006, this one is also composed of alcatel and lucent. And from the finest point, both the internal will have more the existence of the company. This may be the problem of factionalism. For the fusion of enterprise culture, internal management system debugging, etc will be formed certain challenges.

the second is that after the merger of nokia will face reality, the surge of number of employees in the merger, the new nokia will have more than more than 100000 employees. Personnel to expand, the nokia is likely to take actions, to streamline organization structure, optimize allocation of personnel. But redundancy is likely to bring nokia’s financial burden.

is again after the merger deal with competitors is still huawei and Ericsson. A merger, although is get expand market share, good too. But the two merged in market competition is still not able to Ericsson and huawei fall behind, they still is the main threat to nokia. Nokia how two companies in different fields lead to integrate innovation, forge ahead of Ericsson and huawei technology advantage, also is the key.

the last is a question of time cost. Merger between the two giants. Often associated with time cost is high. Microsoft to buy nokia mobile phone sector, for example, today, its layoffs integration also definitely unfinished, but when Microsoft for such integration, competition is a work in progress. Nokia how to quickly reduce time costs, make the merged company rapidly into the market competition will be even more crucial.

epilogue:

after nokia’s mobile phones sold well known, most of the services already front moved to behind the scenes, although not as often as he used to be in for we know and focus on areas of consumer, but behind the scenes, he would be convenient for our online life provides the most basic and most important support. The deal, let nokia have larger size, in front of the market, also can have stronger ability of offensive and defensive. The merger brought nokia new opportunities and new challenges. Nokia can seize the opportunities and overcome challenges, for its future development is very important. But review the nokia 150 years of history, we will find is that nokia’s great opportunities and challenges. Nokia’s history is the history of the change to one hundred and fifty, nokia cut wood, made of paper, has sold rain shoes and tires, also made the bullet, and television, and now sell mobile phone business, transiting operation communications telecommunications network. For nokia mobile phones into the history of the world are familiar with, but it is not yet known nokia towards the future. Nokia has experienced the transition of the behind the scenes, but the “science and technology, people-oriented” concept has never changed. We also expect that nokia will perfect to complete the merger integration, make the two together to produce more synergies, let nokia graced by a wave of technological revolution.

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