On the sidelines of St. Petersburg International Economic Forum 2018 being held in Russia, Nokia and Rostelecom agreed to create a joint venture in the field of research and development. In the joint venture, Rostelecom will have the control package, and the role of the new R&D company will be to create a portfolio of solutions in cooperation with domestic companies, with a goal to increase the capabilities of providing advanced network technologies and cloud solutions made in Russia.
This reminds me of Nokia Shangai Bell in China, where Nokia China acquired Alcatel Shangai Bell (as part of the Alcatel-Lucent acquisition) and entered into a joint venture with public Chinese company. The difference here is that Rostelecom’s and Nokia’s joint venture is in the field of R&D, and not a joint company. Rostelecom is Russia’s leading network services provider, with the biggest domestic backbone network and is providing licenses for wide range of telecommunications services. In 2016, the company posted a revenue of 4.44 billion dollars with a net profit of 182 million dollars, according to Wikipedia.
The decision to deeper ties with a big domestic player in Russia to accelerate development of new technologies (and secure the presence on the Russian market) is a smart move, considering that Russia is the biggest European market and one of Europe’s fastest growing markets for fibre-based broadband, with Rostelecom’s own fibre broadband access network covering more than 33 million premises. By the end of 2016 some 60% of the company’s broadband subscribers were on its fibre infrastructure, according to a research at budde.com.au.
Nokia Corporation didn’t officially announce this agreement, and we are still waiting for an official press release. Once it is out, we will add it to the article. Rostelecom had put out a press release that you can check out here, while TASS has a version in English available here.