7 diagrams to understand the merger: Nokia & Alcatel-Lucent

The new pattern of global communications companies

  April 15, 2015, thunder from the ground, came the merger of Nokia, Alcatel – Lucent’s big news:
  “Third and fourth communications companies combined, global communications vendor ranking was again disrupted, the competitive landscape has gradually clear.”

  First of all, we can see changes happened in vendors’ 2014 earnings revenue ranking.

Big5 communications companies overall revenue ranking (million)

Big5 communications companies overall revenue ranking (million)

  Five telecommunications operators have clearly differentiated into three camps: Huawei and Ericsson, first camp; struggling to break-even line, Alcatel-Lucent and Nokia are restructuring the second camp; And ZTE seems struggling to catch up in the last part of the third camp.

Big4 communications companies overall revenue ranking (after merger)

Big4 communications companies overall revenue ranking (after merger)

  After the merger, the new company of Alcatel Lucent and Nokia, will beyond Ericsson (judged by revenue). And most important is that, each income scale of the top three have reached more than $ 30 billion.

  Second, 2014 Big4 manufacturers global markets’ revenue ranking, show the current telecommunications industry competitive landscape.

Big4 Manufacturers 2014 revenue ranking in different markets

Big4 Manufacturers 2014 revenue ranking in different markets

  (Note: Huawei earnings in Europe and the Middle East and Africa will merge lists, so will all the other manufacturers to do the appropriate summary, which is the sum of revenue ZTE Europe and Oceania and Africa markets.)

  Again, competition among communications companies, technical strength and cost advantages is the key.

R&D expenses and the proportion of income

R&D expenses and the proportion of income

  After the merger, Nokia & Alcatel-Lucent, with 40,000 staff and $ 5.7 billion in annual R & D investment, will drive future growth 5G, IP, software-defined networking, cloud technology, data analysis, and sensing and imaging technology and other technologies development.

Nokia merged Alcatel-Lucent is the trend.

  Matthew telecommunications equipment industry is very obvious, the strong will be stronger, the weak will be weaker, Nokia and Alcatel-Lucent living second camp, with the obvious gap between Huawei and Ericsson in first camp.

Alcatel-Lucent revenues Architecture

Alcatel-Lucent revenues Architecture

  “Only three of the world’s long-term profitability of telecom equipment manufacturers can survive the next few years.”So is the inevitable choice combined competition and survival needs.

Nokia Alcatel-Lucent merger is complementary advantages.

  Nokia’s focus on mobile broadband network services, so sales for the operators in, IP and fixed-line transmission is the missing link of its business. 

2014 Capital expenditure of China CMCC

2014 Capital expenditure of China CMCC

  For example, from the 2014 figure of China Mobile’s fixed investment, the mobile communication network investment and transmission network investment expenditures almost the same proportion. Nokia’s transmission network revenue is quite missing part, if compete against Huawei, ZTE, Alcatel-Lucent Even Ericsson.

Nokia company has a rich history on mergers and acquisitions.

  From 2007, Nokia Siemens Networks, the network service business merged with Nokia Siemens Networks, the 2011 acquisition of Motorola’s wireless network assets, to the 2014 return of Nokia Group and become a pillar of the business, with Rajeev headed Nokia’s existing management in seven years experienced business integration, cultural integration, the strategic adjustment of experience, will help to deal with Alcatel-Lucent merger challenges posed.

Nokia Network 2010 to 2014

Nokia Network 2010 to 2014

  The pattern of global communications companies thus evolved into three camps Huawei, Nokia and Ericsson, the three pillars of the situation.

(FOT blog sharing only. Source: flipboard. Author is a senior people communications industry)

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