Nokia to acquire Comptel for $370 million

NEW DELHI: Finnish telecoms network equipment maker Nokia said that it will buy company Comptel for about 347 million euros (296 million pounds) to expand its software services business.

Comptel’s software is today in use by more than 300 operators, covering 1.2 customers in 90 countries, and it processes 20% of the world’s mobile data usage daily, with an emphasis on developing markets (it has no customers in North America, for example).

The planned acquisition is part of Nokia's strategy to build a standalone software business at scale by expanding and strengthening its software portfolio and go-to-market capabilities with additional sales capacity and a strategic partner network. Comptel would bolster Nokia's software portfolio by adding critical solutions for catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization.

The combination of Nokia's Service Assurance portfolio and Comptel's Service Orchestration portfolio would enable a dynamic closed loop between service assurance and fulfillment that simplifies management of complex heterogeneous networks. When combined with Nokia's Cloudband(TM) and Nuage(TM) portfolios, Nokia would be able to provide customers with complete, end-to-end orchestration of complex Network Function Virtualization (NFV) and Software Defined Networking (SDN) deployments.

Nokia is committed to building its software business and is backing its commitment with strategic investments. The timing of the Comptel purchase is important as our customers are changing the way they build and operate their networks. They are turning to software to provide more intelligence, automate more of their operations, and realize the efficiency gains that virtualization promises. We want to help them by offering one of the industry's broadest and most advanced portfolios. Comptel helps us do that," says Bhaskar Gorti, president of Nokia's Applications & Analytics business group.

"After careful examination of the Tender Offer, the Board of Directors of Comptel has unanimously decided to recommend the shareholders to accept it. For a shareholder, the tender price offers a possibility to sell the shares risk free at a price reflecting the potential future strategic value of the company. The Board of Directors of Comptel believes that Nokia's global reach, strength of brand and cross-selling opportunities would benefit the activities of Comptel. Combining Comptel's business with Nokia would offer the customers of both Comptel and Nokia a wider and more innovative software portfolio which would improve competitiveness of the combined business unit, especially in the eyes of larger customers," says Pertti Ervi, Chairman of the Board at Comptel.

"Together with Nokia we would create an agile and innovative player which can challenge current market leaders head-to-head. Throughout the past five years we have been working hard to sharpen our thought leadership and competitiveness by rebuilding the brand, product portfolio and values driven culture. I am 100% confident that we are now capable, ready and passionate to take the next step in scaling and expanding our business beyond the ordinary with a new set of resources that Nokia would provide us," says Juhani Hintikka, President and CEO of Comptel.

In November 2016, Nokia announced its long-term strategy, Rebalancing for Growth. As part of the strategy, Nokia is strengthening its software capabilities in key areas: portfolio, services and go-to-market. The planned acquisition of Comptel would bolster go-to-market efforts with a software-dedicated sales force and strong partner network. It would also support Nokia's desire to build a portfolio that allows customers to automate as much of their network and business operations as possible - including customer services, self-optimization, management and orchestration. Comptel would help with this objective by bringing catalogue-driven fulfilment and digital service lifecycle management, complex event processing, applications for customer engagement and service monetization; and emerging technologies for context-aware on-device commerce and IoT pattern detection.

When Comptel is combined with Nokia's OSS, BSS, analytics and cloud technology, customers will be provided with end-to-end orchestration of complex NFV and SDN deployments - including the ability to close the loop between service assurance and fulfilment - and the intelligence and automation required to create and manage increasingly complex service offers. This would give customers a new level of automation and would be a massive improvement over the error-prone manual processes and inefficient systems in use today.

Comptel is a long-time Nokia partner. It is a listed Finnish company, founded in 1986, with over 800 employees in 32 countries. Comptel has completed over 1 400 customer projects in more than 90 countries. It processes 20 percent of world's mobile usage data every day, orchestrates communications and digital services for more than two billion end-users daily and its largest customer has around 300 million subscribers. In 2015, Comptel's revenue was EUR 98 million with an 8.7 percent operating margin. The company's major sites are in Finland, Bulgaria, Malaysia, India, the United Kingdom and Norway.

The planned acquisition is not expected to have a material effect on the operations and business locations of, or on the number of jobs at Comptel.