Nokia and ChinaMobile Ink $1.53 Billion Cloud Infrastructure Deal; and Other News


Nokia and ChinaMobile Ink $1.53 Billion Cloud Infrastructure Deal

ChinaMobile has recently closed a deal with Nokia that will allow China’s largest telco to operate a cloud infrastructure network, with Nokia Networks China and ASB providing support services. The agreement is valued at up to $1.53 billion.

The deal stipulates that Nokia will deploy its 5G-ready Airscale Base Station, a highly scalable solution which allows multiple radio technologies to operate simultaneously on a single base station and is optimal for internet of things support. The Finnish telco will also provide cloud services, mobile, fixed, IP routing, optical transport, and customer experience management technology in addition to operational support.

Nokia’s relationship with ChinaMobile traces its roots back to 1994, when it supported the telco’s first GSM call. ChinaMobile is currently the world’s largest mobile provider, with 833.8 million subscribers, and reported a 22.3% surge in its data business last quarter. While it reported a 10% drop in profits during the same period, ChinaMobile attributed it to greater investment in network infrastructure.

Mike Wang, president of the joint management team of Nokia Networks China and ASB noted, “This is a highly significant agreement with our longstanding partner; it strengthens Nokia’s position as a leading provider of next-generation technologies in China, and reflects our larger footprint in the country following the acquisition of Alcatel-Lucent. We are committed to delivering mobile broadband capabilities that will allow operators to optimise their networks and open up new opportunities for them and their subscribers.”

Nokia and ChinaMobile also agreed to continue working to define the products and services necessary to meet the needs of the operator’s increasing connectivity demands. In addition to developing networks to be compatible with IoT and 5G, the two firms will continue to develop technologies to enable cloud connectivity and faster internet access.

Mike Wang further commented that “This agreement strengthens Nokia’s position as a leading provider of next-generation technologies in China, and reflects our larger footprint in the country following the acquisition of Alcatel-Lucent. We are committed to delivering mobile broadband capabilities that will allow operators to optimize their networks and open up new opportunities for them and their subscribers.”

FCC Wins Net Neutrality Ruling

The FCC has the authority to reclassify broadband as a telecommunications service, according to a ruling by the US Appeals Court for the DC Circuit. The order clears the way for the FCC to implement and enforce the Open Internet Order which it enacted in February 2015. A previous ruling had held that the FCC could not impose anti-blocking and anti-discrimination traffic management policies against service providers such as Verizon unless it reclassified broadband from an information service to a telecommunications service. The decision is likely to appealed further and end up being decided by the Supreme Court.

The National Cable and Telecommunications Association commented that: “We are reviewing today’s split decision by the DC circuit panel, and will carefully review the majority and dissenting opinions before determining next steps. Though disappointed in today’s result, we are particularly gratified by Judge Williams’ recognition of the ‘watery thin and self-contradictory’ nature of the FCC arguments used to justify the imposition of common carriage laws on Internet networks. While this is unlikely the last step in this decade-long debate over Internet regulation, we urge bipartisan leaders in Congress to renew their efforts to craft meaningful legislation that can end ongoing uncertainty, promote network investment, and protect consumers.”

The United States Telecom Association echoed similar sentiments expressing disappointment in the ruling: “”The court have unfortunately failed to recognize the significant legal failings of the Federal Communications Commission’s decision to regulate the internet as a public utility, leaving in place regulation we believe will replace a consumer-driven internet with a government-run internet, threatening investment and innovation in years to come. Our industry strongly supports open internet principles and the FCC’s order is wholly unnecessary to keeping the internet open. We will continue to work toward policies that facilitate America’s broadband leadership, are reviewing the court’s decision, and will be evaluating all of our legal options.”

Verizon and AT&T Bid for Yahoo Assets

Verizon and AT&T, America’s largest wireless service providers have both made it to the third and final round of bidding for Yahoo’s corporate holdings and core internet assets. CNBC reports that “After holding a board meeting to review second-round offers, Yahoo will start reaching out to bidders as early as Monday to notify them whether they will make it to the next round.”

They are competing with a consortium of bidders led by Quicken Loans’ Dan Gilbert and backed by Warren Buffett’s Berkshire Hathaway. Verizon, which owns AOL, has primarily expressed interest in Yahoos online advertising technologies and is currently examining how its online assets, such as email and messaging, will complement and bolster the business brought in by AOL. Verizon’s CEO Lowell McAdams previously commented that marrying up its AOL assets with those of Yahoo could make sense for investors.

When asked whether he would consider acquiring Yahoo, McAdams said “We said we would look at it. We have to understand the trends that we’re seeing in some of their results now. At the right price, I think marrying up some of [Yahoo’s] assets with AOL … would be a good thing. One of the things we did [with AOL]was keep it separate from the core company. We have been feeding information from our mobile subscribers into the AOL engine. We’ve only had it six months at this point … I don’t want to declare victory; we’ve got a long way to go. Perhaps some things from Yahoo might make sense. I think we can turn [AOL] into something special.”

Verizon acquired AOL last year for $4.4 billion, in an effort to boost its mobile video and OTT business. AT&T is currently struggling to compete with Verizon’s video business by acquiring advertising technologies.

Microsoft Acquires LinkedIn

Satya Nadella of Microsoft and Jeff Wiener of LinkedIn announced a major deal yesterday in which software giant would purchase LinkedIn for $26.2 billion. The acquisition, which is the largest in Microsoft’s history would merge the company with a markedly different business, which focuses on business-oriented social networking.

The deal is a further indication of Microsoft’s belief that the software business is shifting to cloud computing, a business model in which customers rent software and services remotely. It also echoes a similar deal that Microsoft inked in 2012 to acquire Yammer, an enterprise focused social network. LinkedIn, the world’s most popular business networking site in which people display their resumes and work experience, currently boasts 400 million subscribers, making it the owner of valuable data and insights regarding business interconnections. Maintaining the privacy of users is a concern in this regard, as Microsoft will have access to the communications of users with recruiters and potential employers.

The common thread uniting LinkedIn and Microsoft is that the services they offer cater to professionals. As Nadella noted, “This deal is all about bringing together the professional cloud and professional network.”

LinkedIn will retain Jeff Wiener as its CEO and continue to operate independently under its own banner, following the lead of Facebook’s dealings with WhatsApp and Google’s purchase of Youtube.

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