Nokia Networks has agreed to buy part of Panasonic's wireless network business in a bid to shore up its mobile broadband portfolio and grow its presence in Japan.
The two companies plan to come to the final terms of the agreement by the end of September and complete the transaction on January 1 next year.
The deal covers Panasonic's 3G and LTE base station business and related wireless equipment systems. Panasonic's existing business contracts, employees involved in the relevant businesses and its' customers fixed assets will be transferred to Nokia Networks in Japan.
“Japan is a key market for us, and this agreement is a major milestone in forging closer ties in Japan,” Nokia Networks EVP for AMEA Ashih Chowdhary said.
Via the deal, Nokia said it aims to strengthen its market share in the Japanese BTS market and improve efficiency and quality control for its product development and R&D.
In a research note, Eurotechnology Japan noted that Nokia has the highest share of Japan's mobile base station and infrastructure market, with a share of around 26%. The acquisition should increase this to 35%.
“After failing spectacularly trying to build a mobile phone business in Japan for almost 20 years [during 1989-2008] without success, Nokia is now winning the second time round,” the note states.
“Japan's mobile phone base station market is about $ 2.6 billion/year and for European companies Ericsson and Nokia the most important market globally, although certainly also the most difficult one.”