Microsoft deal delay may mean more Nokia patent concessions

Mon Mar 24, 2014 9:37am EDT
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By Jussi Rosendahl

HELSINKI (Reuters) - Nokia does not expect to close the sale of its phone business to Microsoft until April as talks with Asian regulators drag on, it said on Monday, fuelling speculation it may have to make technology patent concessions to get the deal done.

After selling its loss-making handset business, Nokia - which expected the deal to close this month - will derive more than 90 percent of sales from its telecom network unit, but its patent portfolio is seen as a promising source of future growth.

As a phone maker, Nokia has paid rivals for the use of their licenses as well as charging for its own. A newly restructured Nokia would be freer to push up those fees, analysts say.

Expected future revenue from patents make up as much as half Nokia's roughly 20-billion-euro market capitalization, they say.

Google and Samsung Electronics have asked Chinese regulators to ensure the 5.4 billion euro ($7.4 billion) deal between Microsoft and Nokia would not lead to higher licensing fees, according to media reports.

"(The delay) is a bad sign. They have been discussing with authorities for quite a while already, and they still need more time," Nordea Markets analyst Sami Sarkamies said.

"The biggest risk is in the upside of their patents. It looks like Nokia will have to make bigger concessions to push the deal through," he said.

Nokia shares fell 0.7 percent to 5.24 euros by 1215 GMT.   Continued...

A photo illustration of a man silhouetted against a Nokia logo in the central Bosnian town of Zenica January 23, 2014. REUTERS/Dado Ruvic