& cplSiteName &

Comptel Looks Like the Start of Nokia Software Spending Spree

Ray Le Maistre
2/9/2017
100%
0%

Nokia is excited. It previously announced plans to build a significant standalone software business by pumping up its Applications & Analytics unit, and has backed up its words with actions in the form of a €347 million cash bid to acquire fellow Finnish firm Comptel, a communications sector software specialist. (See Nokia to Create Standalone Software Biz, Target New Verticals.)

You can check out the details of the bid and some excellent analysis of the relative financials by my colleague Iain Morris in Nokia Eyes Bigger Software Role With €347M Comptel Bid.

Some industry analysts have weighed in too. (See Nokia's Buying Comptel: What the Analysts Say.)

But does the deal make sense?

On the face of it, yes. The two companies know each other and have worked together to deploy their relative technologies at a number of operators. Comptel is a steady company with a reliable revenue stream, its financials have improved recently, and in the area of service orchestration in the telco cloud environment, and in real-time analytics in the mobile BSS market, has some capabilities that will give Nokia some good stories to pitch to customers. There doesn't appear to be much product overlap but Comptel doesn't appear to be bringing much in the way of new customer accounts either.

But acquisitions are hard to pull off: The telecoms industry M&A road is lined with crash victims.

And growing a comms industry software business via acquisitions is something that Ericsson has been throwing money at for a number of years now: That has resulted in greater market share but that part of Ericsson's business has not blossomed as it had hoped and doesn't appear to have given it any advantages in the critical MANO (Management and Orchestration) sector, where Amdocs has staked a particular claim to fame by being AT&T's buddy in its ECOMP (Enhanced Control, Orchestration, Management and Policy) project.

Nokia isn't saying that it will build this software business through M&A activity alone but if it is going to scale up any time soon then more acquisitions will be inevitable -- that will add revenues and skills and products but also add cost, complexity and (as so often happens with acquisitions) cause a modicum of confusion and create opportunities for aggressive rivals. The Nokia team says it will engage in further opportunistic M&A when and where it makes sense and this isn't the first time it has much such a move, of course -- about a year ago it acquired Nakina, so it has been through something that is vaguely similar (though smaller and not publicly listed) in recent times. (See Nokia Snaps Up Nakina.)

And you can bet your albondigas (I'm getting in the mood for MWC...) that Amdocs, Ericsson, Oracle, IBM, NetCracker and others will be in a frenzy today, looking at what this means, what might happen next and how they need to respond.

In the meantime, I expect Nokia already has its next target lined up. Before it makes its next move, however, it needs to close the Comptel deal -- that's now in motion, with today's announcement, but it isn't a done deal. Without any hold-ups, it's due to close during the second quarter. But a rival bid could come in and there appears to be at least a hope amongst investors that this might happen as Comptel's share price closed today on the Helsinki exchange at €3.07, slightly above Nokia's bid price. Key Comptel investors have already agreed to accept the Nokia cash bid, but if a higher rival bid comes in, the Comptel board is obliged to consider it.

So at least for a few weeks it will be what's known in UK soccer circles as squeaky bum time for the teams at Nokia's Applications & Analytics unit and the folks at Comptel, most of whom have been told very publicly that their jobs are safe.

And if the deal closes there will be some very close attention paid to exactly how it plays out -- and what happens next.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading


CALLING ALL CLOUD, NFV AND SDN COMPANIES:
Make sure your company and services are listed free of charge at Virtuapedia, the comprehensive set of searchable databases covering the companies, products, industry organizations and people that are directly involved in defining and shaping the virtualization industry.


(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Ray@LR
100%
0%
Ray@LR,
User Rank: Blogger
2/9/2017 | 1:55:07 PM
Where next for Nokia?
What should Nokia be lokoing to bid for next? Any ideas out there?
More Blogs from Shades of Ray
I'm just back from a brief visit to Tel Aviv where I met a broad range of innovative teams from companies as diverse as AT&T, Sedona, Allot and Ethernity.
Time is running out to get your entries in for the industry's most prestigious awards.
The Light Reading group is now much more than the mothership website and the Heavy Reading analyst group -- the family has grown to include the Telecoms.com news site, dedicated communities and wiki-style databases.
I'm prepared for the worst that Barcelona can throw at me.
Ahead of MWC in Barcelona, talk has started to circulate that nuptials may be in line for Cisco and Ericsson.
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
VeEX at ANGA COM

6|27|17   |     |   (0) comments


At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
LRTV Custom TV
The Overall Objective Is to Win the Game

6|26|17   |     |   (0) comments


SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Does AT&T Deserve Time Warner?
Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.