Sep 17, 2013

The Changing Facet of Telecom

The change in the tech and telecom industry is palpable with a host of mergers and acquisitions recently. Whether it’s the Nokia-Microsoft deal or Verizon-Vodafone deal, one thing is certain, that this sector is heading for a wide transformation. Nokia, once the king of good times, has finally found shelter under Microsoft with the latter deciding to buy it out in a $7.2 bn deal. Although, the Microsoft-Nokia deal talks were doing the rounds for quite some time but it is all set to fructify now. No doubt, the beleaguered business of Nokia will get a boost with the deal though in the midst it is on the verge of losing its own identity. Once claimed to be the #1 handset maker, Nokia bite the dust with its rivals Apple and Samsung getting stronger on the back of new smartphone launches. Meanwhile, for Microsoft there are challenges ahead as it is not an android operating system, but it is entering into the mobile ecosystem. “This is the best option for Nokia and Microsoft. Though there are challenges, but with this Microsoft has armed itself to compete with its rivals Apple and Google. Acquiring Nokia will help it to combine its Windows Phone operating system with the hardware and at the same time will help in expanding the smartphone-related patent portfolio. Microsoft is slowly moving from its traditional desktops and laptops to smartphones and tablets,” said GirishTrivedi, founder, Monk Consulting. Just after the announcement, shares of Nokia jumped more than 40% to 4.15 euros, currently its biggest ever one-day rise in volume 8 times its 90-day average. .In a note, Deutsche Bank, estimating Nokia could trade up to 4.40 euros per share, said that “given the material expected benefits to Nokia’s earnings, net cash, and upside in the share price from current levels, we upgrade from ‘sell’ to ‘hold’.” Frost & Sullivan said the mobile ecosystem is evolving very fast and Microsoft has place big bets on its Windows 8 OS. The response from other mobile device companies for Windows 8 based mobile phones was not very encouraging. Hence, it will be critical for Microsoft to have a strong company at their side to implement their strategy.

Source:Voice&data (

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