Talks between Nokia and Alcatel-Lucent mooted

Nokia is reportedly looking at a possible tie-up with Alcatel-Lucent once it has completed the disposal of its handset business to Microsoft.

Citing several people familiar with the issue, Reuters said that no formal talks between the two companies have started yet, although the two sides have spoken in the past.

Nokia, under the leadership of interim CEO Risto Siilasmaa, has already begun internal discussions on future strategy, the sources said, adding that a decision could be months away.

Nokia is in a "period of reflection trying to figure out what they want to do," one of the sources said.

They said there were possibilities for Nokia such as having "the option to buy the entire Alcatel-Lucent or just the wireless business … Nothing is imminent."

The two companies have long been seen as potential merger targets, with Alcatel-Lucent folding into the NSN infrastructure division. At the time, Siemens was a 50 per cent shareholder in NSN, but has since sold its stake to Nokia, making negotiations between future targets easier as they will be dealing with two boards of directors, rather than three.

As Nokia will shortly dispose of its handsets business, Alcatel-Lucent also no longer manufacturers phones, although it does license its brand name to a Chinese manufacturer.

A merger NSN-Alcatel-Lucent would be likely to command a network infrastructure market share of around 30 per cent, just behind Ericsson, and ahead of Huawei.