Nokia has signed a definitive agreement with China Huaxin Post & Telecommunication Economy Development Center to integrate Alcatel-Lucent Shanghai Bell (ASB) and Nokia's China business. The new joint venture will be branded Nokia Shanghai Bell (NSB).
The arrangement is similar to the joint venture that existed between Alcatel-Lucent and China Huaxin, which is a Chinese state-owned investor.
The new deal concludes an interim operational agreement that was made prior to Nokia’s takeover of Alcatel-Lucent, which has allowed the Nokia’s China business to effectively operate as one company since January 2016 when the takeover took effect.
The joint venture will carry on the major part of Nokia's activities in China. It will continue to develop new technologies in areas like IP routing, optical, fixed and next-generation 5G. NSB’s research and development activities will total around 16,000 personnel, including 10,000 researchers, working across six R&D sites in China.
Building on its understanding of the local market, NSB will aim to increase Nokia's market presence in China and selected other countries in the region. NSB will also support strategic initiatives of the Chinese government.
The agreements to create Nokia Shanghai Bell are expected to close by July 2017, subject to various customary administrative, legal, regulatory and other conditions. Nokia will then own 50 per cent plus one share of NSB, with China Huaxin owning the remainder. The new joint venture will have one board of directors and one management team.
Rajeev Suri, president and CEO of Nokia Corporation, said: “Today's agreement is historic for Nokia and for China, marking the next step of our decades-long commitment to the country and underscoring China's leading role in developing next-generation communication technologies. Nokia Shanghai Bell will enhance our ability to innovate, helping us strengthen ties with communication service providers and expand to new, fast-growing sectors in need of high-performing networks.”
Yuan Xin, general manager of China Huaxin, added: “We are fully confident in the new joint venture's success during the industry transformation brought by the new technologies like 5G and IoT. The successful combination globally and in China brings together the leading E2E network technologies and most powerful innovation engines from both sides. We're excited to work with Nokia to establish a future-oriented innovative technology company, with a win-win cooperative model for the bigger success in the new era.”