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Improves its position with NTT DoCoMo with the planned acquisition of Panasonic's radio access networks business.

Nokia Networks Buys RAN Assets in Japan

Ray Le Maistre
7/31/2014
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In yet another sign that it has turned a corner and is brimming with confidence, mobile network infrastructure specialist Nokia Networks has struck a deal by buy the radio access network (RAN) division of Japanese technology vendor Panasonic System Networks.

Nokia Networks is buying assets and customer contracts and will take on a number of employees in Japan. According to local media reports, the Panasonic System Networks currently generates revenues at a run rate of about $190 million per year, about 10% of the total mobile broadband network infrastructure market in Japan.

Panasonic's main RAN equipment customer is Japan's leading mobile operator NTT DoCoMo Inc. (NYSE: DCM), where Nokia Networks is also a strategic supplier. The other major mobile operators in Japan are KDDI Corp. and SoftBank Mobile Corp. . (See Docomo Chooses LTE-Advanced Partners.)

Panasonic is selling the unit as part of a broader corporate restructuring strategy that will see it focus on core IT markets.

Financial details were not released. The deal is expected to close by January 1 next year.

Nokia's chief aim is to solidify its position in Japan, a key Asia-Pacific market for Nokia Networks (formerly NSN) and key rival Ericsson AB (Nasdaq: ERIC), especially as 4G matures and 5G developments pick up pace. Competition in intense in the Japanese mobile networks market, as NEC Corp. (Tokyo: 6701) and Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) are also key (indigenous) players. (See DoCoMo Unveils 5G Trial Plans.)

Nokia Networks generated revenues of 1.39 billion (US$1.34 billion) in Japan during 2013 from all parts of its business (hardware, software, and professional services), down by 36% from 2012. The decline was due to a number of factors, including currency exchange rate shifts, and a reduction in network rollouts in Japan during 2013.


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Nokia Networks, which continues to improve its financial fortunes quarter-by-quarter, has spent the past few years selling non-core assets and shrinking its operations, so an acquisition is a significant statement of intent, even if it is focused on one (albeit important) market. (See Nokia Holds Steady in Q2, Raises Outlook.)

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

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mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
8/6/2014 | 5:52:38 PM
Re: Marketing territories
Nokia's going to buy up Blackberry... and re-enter the smartphone market in Asia with a vengeance.

Oh. you wanted speculation based in reality. Sorry about that.
MarkC73
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MarkC73,
User Rank: Light Sabre
7/31/2014 | 11:03:22 AM
Re: Marketing territories
Good to see Nokia hanging in there with a strategy, any speculations on what they might do next?
SachinEE
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SachinEE,
User Rank: Light Sabre
7/31/2014 | 10:36:03 AM
Marketing territories
It is evident that Nokia is trying to safe guard its position in Japan and make it a strong hold. There being high competition in Japan makes it necessary for Nokia to buy assets and contracts making it easier to have most Japan citizens on its side making it the dominant network in Japan and even though there was a decline in the profits last year, this move is likely going to get Nokia back on its feet.
mendyk
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mendyk,
User Rank: Light Sabre
7/31/2014 | 9:43:22 AM
Re: Nokia Networks Buys RAN Assets in Japan
Kiretsu -- a good arrow to have in the quiver.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
7/31/2014 | 9:13:53 AM
Nokia Networks Buys RAN Assets in Japan
Possibly worth noting that it was a collaboration with Panasonic (announced 2007) that established NSN as an LTE supplier to DoCoMo and helped it build a strong position in the Japanese LTE market. Japan has been absolutely critical market for NSN and, especially, helped it survive through the worst times. 

 Edit: http://nsn.com/news-events/press-room/press-releases/together-with-nokia-siemens-networks-panasonic-mobile-communic
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