Nokia says it has signed agreements with industrial investment company China Huaxin Post & Telecommunication Economy Development Center that will lead to the integration of Alcatel-Lucent Shanghai Bell Co. Ltd. (ASB) and Nokia's China operations. The new joint venture will be called Nokia Shanghai Bell.
Alcatel-Lucent had operated ASB as a joint venture with China Huaxin to address the Chinese market. The joint venture had won several large contracts from major operators in the country (see, for example, "Alcatel-Lucent to expand broadband FTTH network for China Telecom" and "Alcatel-Lucent wins Broadband China framework deals with China Mobile and China Unicom").
With Nokia's acquisition of Alcatel-Lucent in 2016, Nokia and China Huaxin had reached an interim agreement before Nokia's acquisition closed to form a new joint venture. ASB and Nokia's China business had effectively been operating as a single entity since January 2016, Nokia says.
The agreements to create Nokia Shanghai Bell are expected to close this July, subject to various customary administrative, legal, regulatory, and other conditions. Nokia will own 50% plus one share of the joint venture, with China Huaxin owning the remainder. Nokia Shanghai Bell will have one board of directors and one management team.
The joint venture will continue development of a wide variety of technologies and platforms in areas such as IP routing, optical networks, and fixed and next-generation 5G wireless. Nokia Shanghai Bell also will "look for opportunities in select overseas markets," in the words of a press release.
"Today's agreement is historic for Nokia and for China, marking the next step of our decades-long commitment to the country and underscoring China's leading role in developing next-generation communication technologies," said Rajeev Suri, president and CEO of Nokia. "Nokia Shanghai Bell will enhance our ability to innovate, helping us strengthen ties with communication service providers and expand to new, fast-growing sectors in need of high-performing networks."
"We are fully confident in the new joint venture's success during the industry transformation brought by the new technologies like 5G and IoT [Intenet of Things]. The successful combination globally and in China brings together the leading E2E [end to end] network technologies and most powerful innovation engines from both sides," added Yuan Xin, generalmanager of China Huaxin. "We're excited to work with Nokia to establish a future-oriented innovative technology company, with a win-win cooperative model for the bigger success in the new era."
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