Eurobites: AlcaLu & Nokia Merger Talk Resurfaces

Also in today's EMEA regional roundup: Russian operators join forces on LTE; Ob3 satellites lift off; Deutsche Telekom takes extra mobile security measures.

  • Alcatel-Lucent (NYSE: ALU) saw its stock gain nearly 9% on the Paris bourse Thursday following a report in Germany’s Manager Magazin that it has been holding merger and/or partnership discussions with Nokia Corp. (NYSE: NOK) during the past few months. AlcaLu's stock ended Thursday at €2.89, up 8.6%, and gained a further few euro cents to €2.91 Friday morning, indicating that investors are either taking the speculation seriously or have over-indulged on breakfast egg nog. Nokia's share price also jumped in value on Thursday following the report, climbing 3.3% to €6.54. The share price slipped by 2 euro cents to €6.52 in Friday morning trading. The two companies have reportedly held talks in the past -- with stock prices reacting accordingly -- but with both companies now showing signs of improving financial health, investors appear to be taking reports of a potential relationship more seriously. Eurobites believes a full merger could be disastrous but that there is potential for collaboration in a number of areas around key developments such as virtualization, small cells, CEM, security and analytics. (See Alcatel-Lucent CEO: We Can Go It Alone, Nokia Ups Guidance But Investors Take Fright, Alcatel-Lucent: Back From the Brink, Eurobites: AlcaLu Improves Margins, Cuts Losses in Q3, Eurobites: Born-Again Nokia Blooms in Q3 and ALU + NSN: A Reality Check.)

  • Mobile TeleSystems OJSC (MTS) (NYSE: MBT) and VimpelCom Ltd. (NYSE: VIP) are to join forces on the development and sharing of LTE networks in Russia. Under the terms of the agreement, MTS will develop shared mobile data networks in 19 regions, while VimpelCom will do likewise in 17 regions. The agreement runs for seven years, though it does not preclude either operator developing their own networks in addition to those set out in the deal.

  • O3b Networks Ltd. , the satellite network operator so called because its declared ambition is to connect the "other 3 billion" people on the planet who aren't already connected, has successfully launched its latest four satellites from the Space Center in French Guiana. O3b's Internet coverage area includes markets in Asia-Pacific, the Middle East, Africa and the Americas. Here at Eurobites Towers we always say that you can't beat a bit of lift-off video, so strap yourself in and feast your eyes on this.

  • Deutsche Telekom AG (NYSE: DT) says it has taken additional security measures to thwart any potential attacks on its mobile network centered on the vulnerable SS7 protocol. The operator now boldly states that the "attack scenario in question is now no longer possible." Sounds like a challenge to these ears…

  • EE , the UK mobile operator that itself is at the epicenter of an M&A storm right now, plans to acquire Mainline Communications, a telecom reseller targeting the business market, reports the Daily Telegraph. EE already owns a quarter of Mainline.

  • UK regulator Ofcom has published a consultation on regulation it introduced in 2010 forcing Sky to make its Sky Sports 1 and 2 channels available to other pay-TV providers. If it is decided that Sky no longer has to meet this obligation there will be repercussions for rival BT Group plc (NYSE: BT; London: BTA), which has recently been trumpeting the fact that it now offers Sky's sports channels on its YouView platform.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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