Origin of the Rumor

News that Nokia is considering the sale of its mobile network division has captured market attention. According to insiders, this division has piqued the interest of potential buyers, including Samsung Electronics. Nokia has been in discussions with advisors about potential options for its mobile network business, such as partial or full sale, spin-off, or merger with competitors. Currently, the negotiations are still in the early stages, and it is uncertain whether Nokia will decide to proceed with any transaction.

Overview of the Mobile Network Division

Nokia's mobile network division is its largest business segment, primarily providing communication network equipment and services, including base stations, radio technologies, and related servers. These technologies and products are core assets for global wireless operators in transmitting signals and are crucial for building efficient mobile networks. In 2023, the mobile network division contributed approximately 44% of Nokia's total revenue.

Nokia's mobile network business includes equipment for signal transmission to mobile devices, encompassing various base stations and radio technologies that are key components of 5G network deployment. Additionally, Nokia provides other related equipment, such as servers, to support the needs of wireless operators.

Business Challenges and Strategic Adjustments

Due to the decline in demand from telecom operators, especially European telecom operators who have postponed costly network upgrades, the division has faced significant challenges in recent years. Since taking office, Nokia CEO Pekka Lundmark has been seeking new growth opportunities to reduce reliance on operator network construction and has made progress in cost control, product roadmap protection, new customer transactions, and increasing the share of existing customers.

Market Reaction and Potential Valuation

Affected by the sale rumors, Nokia's share price in Helsinki rose by 5.1% to €3.98, marking the largest increase since April of this year. The company's market value reached €22.3 billion (approximately $24.7 billion). Notably, the entire mobile network division is potentially valued at around $10 billion. Samsung Electronics has expressed preliminary interest in acquiring part of Nokia's assets, hoping to expand its scale in the field of wireless access networks. Furthermore, any potential asset divestment could also attract interest from other competitors.

Official Refutation

Despite intense market discussion, Nokia officially denied the reports about the sale of its mobile network assets, emphasizing the highly strategic significance of the mobile network business to the company. Nokia stated, "There is nothing to announce, nor are there any related internal projects." The company stressed that the mobile network business is of "high strategic significance" and has made significant progress in various aspects.

Conclusion

In summary, although the market has rumored that Nokia may sell its mobile network division, Nokia has officially and clearly denied these rumors, emphasizing the strategic importance of the mobile network business. Nokia will continue to commit to the development and advancement of this division to meet market challenges and seek new growth opportunities.

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