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Nokia Will Create 4 Business Groups After Alcatel-Lucent Deal

The units will combine products from both companies and focus on such areas as mobile, fixed and optical networks, as well as software and analytics.

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Nokia will split its networking business into four business units after the acquisition of rival Alcatel-Lucent closes, part of the larger organizational and executive restructuring that company officials unveiled Oct. 7.

Nokia announced the $16.6 billion deal for Alcatel-Lucent earlier this year, a move that would create a major player in the global networking space that would challenge such top vendors as Ericsson, Huawei Technologies and Cisco Systems. The deal has gotten approval from some of the top regulatory agencies in regions like the United States and the European Union, and now Nokia officials are getting ready for what will happen after it closes.

"We are making very good progress on being ready to operate as a combined company when the proposed exchange offer closes," Rajeev Suri, president and CEO of Nokia, said in a statement.

The new business groups will focus on mobile networks, fixed networks, applications and analytics, and optical networks, according to Nokia officials. Together, the groups will offer a portfolio of products that offer customers the hardware, software and services they need to build end-to-end networks. In addition, Nokia Technologies will continue as its own business group. Each group will be responsible for their products, but will have a common Integration and Transformation Office to help with integration between the portfolios.

All the groups will report to Suri.

The Mobile Network group will include the radio portfolios from Nokia and Alcatel-Lucent and the bulk of their core network portfolios, such as IMS/voice-over-LTE (VoLTE) and subscriber management. Fixed Networks will consist of Alcatel-Lucent's current fixed network business, including copper and fiber access products and services. Applications and Analytics will be a combination of the software and analytics operations from both companies, while IP/Optical Networks will include Alcatel-Lucent's current IP routing, optical transport and IP video businesses and its Nuage software-defined networking (SDN) startup, and Nokia's IP partner and packet core products. The group will be aimed not only at service providers, but also Web-scale organizations.

Nokia Technologies will continue to concentrate on licensing and pushing along new technologies, officials said.

"Our goal is to position each business group for clear leadership in its particular market and to create a combined portfolio that provides the scope and scale our customers expect, underpinned by a strong focus on innovation, quality and superb execution," Suri said.

There will be a single sales organization for all groups except for Nokia Technologies.