Nokia is considering a sale of HERE maps to concentrate its efforts on expanding its Networks business and improving its debt rating, according to Bloomberg based on information from people familiar with the company’s plan.
Uber Technologies is one of the potential buyers
According to the report, Nokia contacted Uber Technologies and private equity firms as potential buyers of HERE maps. Sources said some of the automakers in Germany were also interested to acquire the business. The Finnish technology company is expected to start the bidding process for maps business this month.
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Based on Nokia’s financial reports, HERE Maps is worth approximately €2 billion or $2.1 billion. The figure shows that the mapping business lost significant value since the Finnish technology company acquired Navteq for $8.1 billion in 2008.
The sources suggested that Nokia will probably decide not to pursue a sale if it cannot get a sufficient price for HERE maps. According to them, the company is currently working with a financial adviser to explore a deal.
Nokia reported that HERE maps generated sales of €970 million for the full year and recorded €1.24 billion in operating loss including a goodwill impairment of €1.21 billion. Last January, the company anticipated that its maps and patents businesses will achieve sales growth this 2015.
Nokia may use potential proceeds to boost its Networks business
Sebastien Sztabowicz, an analyst at Kepler Cheuvreux in Paris, suggested that Nokia may use the potential proceeds from a sale of HERE maps to boost its Networks business including an acquisition of a portion of Alcatel-Lucent.
In a note to clients, Sztabowicz wrote, “We believe a sale of the mapping business could give further credibility to the scenario of an offer on Alcatel-Lucent’s wireless access business.”
Last month, Nokia Networks in partnership with NTT Docomo demonstrated its 5G wireless technology in an indoor trial and achieved downlink speeds of more than 2 Gbps using higher frequencies in the 70 Ghz spectrum.
Nokia Networks CTO Hossein Moiin emphasized that the company’s focus is to help operators monetize the immense revenue potential of future-ready technologies and to address the increasing network coverage and capacity requirements effectively.
NTT Docomo with the help of Nokia Networks aims to introduce the 5G wireless technology during the 2020 Tokyo Olympics using
Last year, Nokia made several acquisitions including the 3D geolocation technology from Nice Systems. The acquisitions provide Nokia Networks more access to tools and technical expertise to develop its capabilities further.
Nokia CEO aims to improve company’s rating
Nokia CEO Rajeev Suri aims to reduce the company’s debt and improve its rating. Currently, the company has a junk rating.
The Finnish technology company has three businesses left (maps, networks, and research & development) after selling its devices and services unit to Microsoft for $7.5 billion.
Nokia Networks represents approximately 90% of Nokia’s total revenues. In January, Nokia posted net income of €443 million and revenues of €3.8 billion for the fourth quarter.