Nokia on Thursday announced plans to acquire fellow Finnish company Comptel for $370 million (347 Euro) in a bid to boost its appeal to telecom operators in a rapidly-changing market.
According to Nokia, the acquisition is part of the company’s strategy to build a standalone software business at scale. The company indicated the addition of Comptel would “bolster Nokia’s software portfolio by adding critical solutions for catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization.”
Perhaps more importantly, though, Nokia said the combination of its own Service Assurance portfolio with Comptel’s Service Orchestration assets would allow Nokia to provide its customers with end-to-end orchestration of network function virtualization (NFV) and software defined networking (SDN) deployments.
“The timing of the Comptel purchase is important as our customers are changing the way they build and operate their networks,” Bhaskar Gorti, president of Nokia’s Applications and Analytics business group said. “They are turning to software to provide more intelligence, automate more of their operations, and realize the efficiency gains that virtualization promises. We want to help them by offering one of the industry’s broadest and most advanced portfolios. Comptel helps us do that.”
The announcement comes as Nokia and fellow equipment vendors like Ericsson struggle to find their footing in a market that is rapidly shifting to undermine their traditional revenue sources.
Last week, Nokia in its earnings report revealed sales in its Networks business were down 14 percent year over year on a non-IFRS basis, while Nokia Technologies saw sales slide 25 percent year over year. All told, net sales revenue was down 13 percent year over year, while total operating profit was down 27 percent from 2015 figures.
Nokia CEO Rajeev Suri at the time acknowledged 2016 was a “transition” year for the company, but said it was “positioned well for the future” thanks to its fleshed out portfolio “spanning mobile, fixed, routing, optical, stand-alone software and more; with solid opportunities to drive higher returns through expansion into new customer segments; with emerging businesses in digital health and digital media; and with greatly expanded patent and brand licensing activities.”
