We've already known for some time now that Nokia (News - Alert) is a force to be reckoned with in next generation communications. Ever since its phone market collapsed, the company pivoted handily into this space and is now one of the lead developers on a host of different systems. It's even gotten to the point where it's considering bringing phones back in. A recent move details its greater diversification, as it announced plans to acquire Comptel, complete with a cash tender offer.
With Comptel under Nokia's banner, reports note, Nokia will have a means to improve its software strategy on several fronts. The biggest such measure will give Nokia access to a new means to develop, provide and even assure services on the various kinds of networks out there, ranging from physical and virtual to a hybrid of both.
Having Comptel on hand would allow Nokia to push into a standalone software business, providing solutions in data processing, customer engagement, and even service monetization that can adjust its priorities according to needs on the ground.
The aforementioned cash tender offer has been reportedly valued at around $371 million as of this writing, though as it's denominated in euros, that may fluctuate until the offer is paid. Each share works out to around $3.24.
Overall, the measure is part of a master plan Nokia started up back in November 2016—though in a lot of ways it may actually go back farther—called “Rebalancing for Growth.” Nokia is keeping with that plan by stepping up its software capabilities in several areas, and with Comptel in play, it could improve its capabilities in the “go-to-market” side of its software operations. The systems Comptel offers, coupled with Nokia's next generation communications technologies like analytics and cloud systems, could provide access to several new technologies like network functions virtualization (NFV) and software defined networking (SDN) deployments.
Nokia has come a long way from its days as the biggest cell phone maker on the block. Stepping up its offerings on several fronts improves the likelihood that it can maintain its position in the field and deliver value for itself and its shareholders. By branching out into different software positions, it's taking advantage of a market that's increasingly running on software, and that allows Nokia a place at a growing market table.
Here, Nokia has demonstrated the importance of diversification in the next generation communications market. There are several different facets of this market, and the more Nokia can develop a presence in, the more likely it will be to survive future downturns.
Edited by Alicia Young