Ovum: Alcatel-Lucent merger with NSN a step backwards

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Daryl Schoolar, Ovum principal analyst, said in an advisory that to merge two companies that have yet to make their previous mergers work would be a step backwards for both parties. ?This is especially true for NSN which appears to be finally getting its post merger self in order. The challenges facing this rumored merger would be immense,? Schoolar said. The analyst said one of the biggest challenges would be rationalizing the two companies overlapping product portfolios in wireless infrastructure. ?This is no small task as wireless revenues accounted for approximately 24 percent of Alcatel Lucent revenues in 2012 (14.4 billion Euros) and at least 40 percent of NSN’s revenues (13.8 billion Euros),? he noted, adding that the the Alcatel Lucent merger struggled with portfolio rationalization. ?There is no reason to believe that an Alcatel Lucent and NSN merger wouldn’t have the same problem,? Schoolar added. He said Alcatel Lucent and NSN would also need to rationalize overlapping operator support services as well. ?All this rationalization of course leads to more layoffs, something that both companies are very familiar with lately, and can be a major distraction,? he said. ?But, mergers as a whole can be distractions and that is something neither of these companies can afford at this time,? Schoolar concluded. UPDATE: This story has been updated to reflect the correct name of the Ovum analyst, who was earlier identified as Tony Cripps. ]]>

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