Nokia is making good on promises to divest non-strategic assets with the sale of its Device Management (DM) and Service Management Platform (SMP) businesses to software acquisition company Lumine Group for about $203 million.
Lumine Group intends to operate DM and SMP as a standalone business, which will be called Motive.
About 500 Nokia employees are expected to transfer to Lumine Group as part of the deal. Nokia said both companies will work closely to ensure a smooth transition and business continuity.
Nokia’s device management software capabilities are designed to help communication service providers remotely manage home broadband access devices, as well as IoT sensors and devices from a variety of different vendors. The company’s SMP is directed at improving customer care service, with coverage spanning more than 150 deployments worldwide and more than 1 billion devices under management.
According to Nokia, the deal marks further progress in its strategy to actively manage its Cloud and Network Services (CNS) business group portfolio in order to invest in other strategic areas and enhance technology leadership, focusing on areas such as 5G core, private wireless and edge.
“Nokia is pleased to enter this agreement with Lumine as another sign of progress in our strategy to focus investment in those areas most important to our business,” said Nokia President of Cloud and Network Services Raghav Sahgal in a statement. “Lumine Group has the telecom industry expertise as well as the strategic focus and resourcing to drive the Device Management and Service Management Platform businesses forward to a stronger future.”
The transaction follows Nokia announcements earlier this year to divest its VitalQIP products to Cygna Labs Corp and to make Red Hat the primary infrastructure platform for Nokia Core Network applications.
The deal is expected to close in the first quarter of 2024, subject to certain terms and conditions.
Much of the discussion about Nokia this month has been around AT&T’s decision to use Ericsson for its open Radio Access Network (RAN) strategy, leaving Nokia in the lurch. Last week, Nokia convened a wide-ranging strategy update session, which lasted more than three hours, to discuss how it will remain competitive. Nokia President and CEO Pekka Lundmark emphasized that AT&T’s decision was not because of Nokia’s performance or technology but a financially driven one.
The Finnish company outlined plans for a major overhaul of its Mobile Networks business, which it expects to be completed by 2026, enabling the division to achieve a double-digit operating margin with net sales of about €10 billion, compared to the approximately €11.5 billion threshold level that would be required today.
In addition to serving service provider customers, Nokia said its Mobile Networks division will accelerate its offerings to faster growing segments, including enterprise, cloud RAN, open RAN and the defense sector.