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Has Nokia Found a Buyer for Its Undersea Cables Unit?

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Nokia in sales talks for unit

Nokia (NOK) has been undertaking a strategic review of its undersea cables unit, including looking at a possible sale of the business. While addressing investors in October 2017, Nokia CEO Rajeev Suri noted that the company was still reviewing its options regarding the undersea cables business and that there were no updates to share at that time.

However, it has recently emerged that Nokia is involved in quiet discussions with French telecommunications company Ekinops about the sale of its undersea cables business. Nokia’s undersea cables business operates under the Alcatel Submarine Networks (or ASN) brand. Nokia came to own this business through its $17.0 billion acquisition of Alcatel–Lucent in a transaction completed in 2016.

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Nokia’s consolidation

Divesting ASN could represent another step in Nokia’s (NOK) consolidation of its business. In 2013, Nokia decided to sell its phone-making business to Microsoft (MSFT) for more than $7.0 billion. That deal with Microsoft allowed Nokia to narrow its focus to three main businesses centered on selling telecom equipment, licensing patents, and digital mapping.

In 2015, Nokia sold its HERE Maps business to a group of German automakers, allowing it to consolidate and exit the competition with Google (GOOGL). Google has been working to persuade automakers to adopt its Google Maps app into their products.

A market leader

Nokia’s (NOK) ASN unit is a leader in the global undersea cables network market. According to Terabit Consulting, Nokia’s market share was 47.0% at one point, compared to the 30.0% share for TE Connectivity (TEL) subsidiary TE SubCom and 1.0% for Ericsson (ERIC).

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