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Nokia Rumored to Be Seeking NSN-Juniper Merger

By Paula Bernier February 20, 2014

Rumors are afoot that Nokia Oyj is considering a purchase of Juniper Networks with an eye toward pairing the router giant’s assets with those of its own Nokia Solutions and Networks unit. This comes from Manager Magazine, which said Nokia’s board was discussing such a deal earlier this year and that to make the merger happen, it would have to offer a premium to Juniper’s $14 billion market value.

This news is important because, if it all pans out, it could see two leading carrier infrastructure providers – both of which have been pioneers in the emerging network functions virtualization and software-defined networking fronts – come together, creating a stronger competitor for both big fish like Alcatel-Lucent, Cisco Systems, Ericsson, and smaller fry.

This all could happen just as service providers, like the tier 1 telcos, are undergoing what many believe will be a major transformation to more software-centric and agile.

NSN has had some success in Asia recently, having announced a new LTE business from China Telecom, which will use NSN’s Flexi Multiradio 10 Base Stations, its NetAct network management system, and related launch optimization, implementation and care services. NSN and Korean carrier SK Telecom also recently revealed they have successfully staged a joint proof of concept that leverages NFV for the evolved packet core. And ABI Research, last fall, said Nokia (along with Cisco) was a leader on the NFV and SDN frontiers.

“Nokia Siemens Networks has taken leadership in virtualizing its Liquid Core network with commercial ATCA and HP servers, and is most aligned with NFV,” according to ABI Research.

Yet, as noted in a Bloomberg story today, sales as Nokia’s NSN division are decreasing as the company faces stronger competition from Chinese network equipment suppliers.

Meanwhile, Juniper Networks and its new software-defined networking strategy have been getting positive reviews from the financial community. Zacks Equity Research in December noted Juniper’s strong cash position ($2.85 billion cash on hand at the end of the third quarter 2013) and traction in SDN, saying both bode well for the communications solutions vendor. Seeking Alpha around the same time wrote that it expects growing EPS and revenue performance from Juniper in the next few years, driven largely by the company’s new OpenContrail SDN efforts.

Edited by Stefania Viscusi

Executive Editor, TMC

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