Nokia is discussing internally whether to approach French rival Alcatel-Lucent about a tie-up, part of the Finnish company's review of how it can grow after the planned sale of its handset business to Microsoft Corp, several people close to the matter said.
No formal talks are underway with Alcatel-Lucent, the sources said. One of the people close to the matter said Nokia held "on again, off again" discussions about buying Alcatel's wireless business as recently as late 2012 and that the two companies could still come back to the table.
Speculation over a combination between Nokia and Alcatel-Lucent goes back several years, as both have struggled to compete with market leader Ericsson and low-cost Asian network equipment rivals Huawei and ZTE.
Microsoft announced on September 3 that it will buy Nokia's phone business and license its patents for 5.44 billion euros. Nokia has said it will evaluate strategy for its remaining operations before the deal closes. Those businesses include a mapping software unit called HERE and a portfolio of patents.
The Finnish phone maker once dominated the global market but has had its mobile business ravaged by nimbler rivals Apple Inc and Samsung Electronics.
Nokia, under the leadership of interim CEO Risto Siilasmaa, has already begun internal discussions on future strategy, the sources said, adding that a decision could be months away.
All the sources asked not to be identified because they were not authorized to speak with the media.
Representatives for Nokia, its network equipment unit, Nokia Solutions and Networks, and Alcatel-Lucent declined to comment.
Nokia is in a "period of reflection trying to figure out what they want to do," one of the sources said. They said there were possibilities for Nokia such as having "the option to buy the entire Alcatel-Lucent, or just the wireless business ... Nothing is imminent."
PROCEEDS FROM MICROSOFT DEAL
Any formal dialogue around a combination would likely be held after Nokia receives proceeds from the Microsoft deal, which is