Nokia-Alcatel combine set to change competitive landscape

Wednesday, Oct 21, 2015

The Nokia Networks and Alcatel Lucent merger could be a challenge to industry leader Ericsson's dominance in the telecom gear space in India and rest of the world as the two companies shuffle their leadership to adopt aggressive market strategy.

Finnish Nokia Networks together with France-based Alcatel-Lucent has a potential to topple market leading Swedish gear maker Ericsson, if the two merging entities adopt cost-effective and aggressive strategy, an ETTelecom poll-based analysis revealed.

Nokia in a 15.6 billion deal took over Alcatel-Lucent, had announced that the two telecom firms would together become innovation leader in the next-generation technology for the IP-based connected world as the both companies have highly complementary portfolios.

A majority of 46% respondents say that Nokia-Alcatel combine can beat Swedish gear major Ericcson while 35% of those opined believe that is not easy for the duo to overthrow Ericsson due to strong market competition.

19% of those who responded to ETTelecom online poll survey feel that the two companies will however take some time to devise a combined competitive strategy.

The Finnish gear provider said that its market share in India is surging.

"Nokia has consolidated its market position in India and is emerging as a leader," Nokia India Technology Head Amit Marwah told ET, adding that the company won some large deals in 2014 that spans around LTE (4G) - both FD LTE and TD LTE, and 2G and 3G expansion and modernization.

The Vodafone India multi-year pan India (19 circles) single RAN (radio access network) deal including modernization of 2G/ 3G networks saw Nokia get the largest share of Vodafone's announced engagement around their Project Spring, Marwah added.

On the other hand, Alcatel-Lucent has however established itself as a leading runner in the IP, optics and fixed-access domains with some wins across packet backhaul, Carrier Ethernet and GPON (Gigabit Passive Optical Network) technologies in India.

The merger, however after certain riders, has been recently cleared by the Chinese government authorities.

Chinese vendors such as Huawei and ZTE directly compete with Nokia and Alcatel-Lucent worldwide, and are also prone to be affected with the merger which according to analysts could be a force multiplier.

Nokia in a merger announcement said that the global scale and footprint of the new company will reinforce its presence in the United States and China, and added that their customers would get benefit from the improved innovation capability and incomparable R&D under the Bell Labs brand.

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