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Alcatel-Lucent CEO Says Nokia Deal Could Close Earlier Than Planned

"I have expectations we could close it earlier than later," CEO Michel Combes said told Re/code on Friday


Alcatel-Lucent CEO Michel Combes said its acquisition by Nokia is moving “extremely smoothly” and could close earlier than originally planned.

When the $16.6 billion deal was announced in April, the companies said they hoped to close it by the first half of next year.

“I have expectations we could close it earlier than later,” Combes said in an interview Friday during a brief trip to Silicon Valley. “Up till now we have had a very smooth journey.”

Nokia got approval for the deal from the European Commission this week and already has the okay from regulators in the U.S., Canada and Brazil.

The deal is designed to allow Nokia to be a more formidable competitor to Ericsson as well as Chinese rivals, such as Huawei.

Combes said the deal was necessary in order to afford the needed investment for 5G, the next generation of wireless technology. The standards for 5G are still being set and commercial networks aren’t expected until 2020, but Combes said there is strong pressure to have products ready as soon as possible.

“We start to think there might be some pilots as early as 2018,” Combes said.

While France-based Alcatel-Lucent isn’t exactly a household name in the U.S., Combes notes that it remains a strong presence here, with more than 8,000 of its 55,000 employees located at offices in Silicon Valley, Chicago and Texas, as well as at the former Bell Labs facilities in Murray Hill, N.J. The company also gets about 14 40 percent of its revenue in the U.S. with equipment at all the major U.S. carriers.

“For Alcatel-Lucent, it’s a very important market.”

By contrast, Nokia’s network business has been strong in Europe and Asia, but not in the U.S. and China.

“We have found the right partner,” said Combes, who will step down once the deal closes, with Nokia CEO Rajeev Suri running the combined company, which will keep the Nokia name.

Combes said Alcatel-Lucent tried having two chiefs once and it nearly drove the company to bankruptcy. That said, he promised to keep a close eye on the combined entity, noting that he left and rejoined France’s Orange three times when he felt the company wasn’t living up to its potential.

Correction: An earlier version of this story mistakenly reported that Alcatel-Lucent gets 14 percent of its revenue in the U.S. That figure should be 40 percent.

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