FT : SoftBank: Placed on hold

Masayoshi Son’s ambition to use Sprint to disrupt the US telecoms market was derailed. Can he get his plan back on track?

When Masayoshi Son, the Japanese telecoms billionaire, stormed into the US in 2013 by snapping up a controlling stake in Sprint for $22bn, his plan was typically audacious. He wanted to combine the third-largest US wireless group with T-Mobile US, the number four, to create a new force in telecoms that would take on the market leaders: Verizon and AT&T.
The smaller carriers have always struggled to win share from Verizon and AT&T, which together have 180m wireless phone subscribers, over 70 per cent of industry revenues and the best network coverage. Yet Mr Son, or “Masa” as he is known, spotted a major weakness at the “big two”.

His strategy was clear: Verizon and AT&T pay chunky dividends — among the highest in the S&P 500 — and their shares are a favourite among income investors. If a combined Sprint and T-Mobile were to launch a price war, he predicted the larger companies would struggle to respond, sacrificing customers rather than profitability and cash flow. He calculated that this would make it easy for Sprint to pick off enough subscribers to become a threat.
For Mr Son, it was a tried and tested strategy that had enabled him and SoftBank, the company he runs, to build the third-largest telecoms group in Japan. After acquiring Vodafone’s Japanese arm in 2006, SoftBank snatched subscribers from the country’s top carriers, overcoming its weaker network with aggressive marketing and discount pricing. Mr Son then scored a major coup with an exclusive deal in 2008 to sell Apple’s iPhone in Japan, rapidly narrowing the gap with his rivals as the product became the country’s best-selling smartphone.
“What Sprint needs to do now is very similar to the challenges we were facing just a short while ago. We’ve been through this before,” says Kazuhiko Fujihara, finance chief at SoftBank’s mobile phone unit in Japan.
Strategic blow
It is almost two years since Mr Son’s SoftBank took an 80 per cent stake in Sprint, but his dream of becoming a force in US telecoms remains just that. Within weeks of closing the deal, the US telecoms watchdog indicated it would block a merger with T-Mobile on competition grounds, dashing his hopes of achieving the scale needed to establish a credible presence in the market.
US-wireless-connections-chart
Mr Son’s biggest miscalculation was his confidence that he could get the deal past the US Federal Communications Commission, which has become increasingly interventionist under President Barack Obama. In 2011 it opposed a merger of AT&T and T-Mobile and more recently it blocked the $45bn takeover of Time Warner Cable by Comcast. Bankers and analysts say the combination of Sprint with T-Mobile is unthinkable before a new president enters the White House in 2017.
“Masa obviously believed there was an opening to merge T-Mobile and Sprint, but the message from Washington regulators, in 2014 at least, was that he was incorrect,” says Craig Moffett, an analyst at MoffettNathanson. “As for 2017, it still remains to be seen.”
Cracking America would have been the crowning moment in a 34-year career that saw Mr Son rise from a cash-strapped software-distributing entrepreneur to Japan’s second-richest man with net worth of about $12bn, according to Bloomberg. He is lauded as one of Japan’s foremost business leaders, earning comparisons with Warren Buffett or Bill Gates. Sprint was supposed to be a springboard to take SoftBank outside Japan and build a global telecoms and technology empire at a time when other groups, such as Vodafone of the UK, were pulling out of the US.

Instead, Mr Son’s US adventure has become a drag on his domestic business, resulting in SoftBank having to issue an embarrassing cut to its earnings guidance last year. In the 2014-15 financial year, its annual net profit of $5.4bn was weighed by a loss of $1.5bn at Sprint. The struggling US network has also distracted attention from his successful investment in Alibaba, the Chinese ecommerce sensation in which SoftBank owns a 32 per cent stake worth nearly $70bn, and internet start-ups in other emerging markets.
Analysts say Sprint will become less of a drag on SoftBank as the internet investments start to pay off. But a failure to turn round Sprint threatens to leave a black mark on his legacy as he prepares to hand power at SoftBank to Nikesh Arora, a former Google executive who recently became Mr Son’s number two and heir apparent.
“Mr Son has won all the big gambles until now. It could become his first major defeat,” says Shigeyuki Kishida, a telecoms consultant at InfoCom Research, a Tokyo-based think-tank.
Though Mr Son is known for walking away from bets before they turn sour, analysts say admitting defeat at Sprint would be especially damaging as he tries to turn SoftBank into a global player. “I don’t expect him to sell Sprint because the US is critical to his long-term vision,” says Neale Anderson, an HSBC analyst.

SoftBank executives have signalled that the company could try to relaunch its bid for T-Mobile, saying it would remain flexible if the regulatory environment were to change.
But by then it might be too late. Dish, the satellite television group controlled by Charlie Ergen, recently entered talks with T-Mobile about a merger, a deal that would give Mr Ergen the chance to deploy the billions of dollars’ worth of spectrum he has been stockpiling. Deutsche Telekom, which owns a majority stake in T-Mobile, may also be looking to sell the carrier to Comcast, according to people familiar with the matter.
Mr Ergen has spent billions of dollars snapping up the airwaves needed to deliver wireless services, but he has yet to reveal what he plans to do with them. He too tried to acquire Sprint in 2013, but was outmanoeuvred by Mr Son; now he has a chance to get his revenge by taking T-Mobile off the market.
Tricky turnround
Telecoms
When Mr Son’s grand merger plan was thwarted, he decided to run Sprint as a standalone business, turning to Marcelo Claure, a trusted executive, to lead the charge. But the turnround of Sprint, which has a decade-long history of disappointing customers and shareholders, has proved more difficult than either man predicted.
A Bolivian-born billionaire, Mr Claure made his fortune by founding BrightStar and turning it into the world’s largest distributor of mobile phones, before selling a majority stake to SoftBank for $1.26bn in 2013. Investors ask why he even took the job, which meant swapping a life in Miami, where he has become something of a celebrity by trying to launch a Major League Soccer team with David Beckham, for a tough corporate slog in Kansas City, where Sprint is headquartered.
When Mr Claure became chief executive last August, he found a company in chaos. An executive who still works at the group says scant attention was paid to the underlying business in the period between Mr Son assuming control and the arrival of Mr Claure, during which Sprint lost 1.5m contract customers. Instead, they focused on securing the ill-fated tie-up with T-Mobile.
For most of the past decade, Sprint has been losing money and haemorrhaging subscribers. “I think Masa may have been surprised by the scale of the challenge at Sprint,” says Walter Piecyk, an analyst at BTIG. “You would think, given the challenges over the past 10 plus years, there would have been some level of due diligence as to what he was getting into.”

In March 2014 — before regulators blocked the deal, Mr Son was asked what he would do if Sprint could not complete the T-Mobile takeover. “We need a certain scale but, once we have enough, it’s a three-heavyweight fight. I’d like to have a real fight, not a pseudo fight. And if I can’t have a real fight, I’ll go in for a massive price war,” he replied.
In that spirit Mr Claure has promised to halve the monthly bills of customers who defect from Verizon and AT&T. The eye-catching offers have managed to staunch the loss of subscribers, with 201,000 leaving in the first three months of 2015, its most recent quarter, compared with 693,000 in the same period last year. Yet investors grumble that with such generous deals, Sprint should not be losing customers at all.
Punitive price war
Price wars do not come cheap: in the first three months of this year, Sprint burnt through cash, sending its net debt up $900m to $29.6bn — around $10bn more than its market capitalisation. At this rate it will run out of money in 2016.
When Mr Claure unveiled Sprint’s most recent results, he told the Financial Times that Mr Son would stand by the company if it needed a new injection of capital: “We have a very large shareholder who is very supportive. If the company needed more money, I think he would provide it.”

Sprint’s challenge has been made all the harder by the resurgence of T-Mobile, the fastest-growing US network. In the most recent quarter, it was the only wireless group to add contract phone customers, signing up almost 1m, while AT&T, Verizon and Sprint lost around 600,000 combined. “Masa didn’t see the T-Mobile turnround coming,” says Vivek Stalam, an analyst at New Street Research. “It came out of left field for the entire industry, but it has been particularly painful for Sprint.”
Even worse, T-Mobile has revived its fortunes with the same mixture of price cuts and eye-catching marketing that Mr Claure is trying to deploy at Sprint. “T-Mobile stole the SoftBank playbook,” adds Mr Stalam. “The price cuts at Sprint are not going to be the game-changer they were in Japan, because T-Mobile has already done it.”
Mr Claure insists that there is room for two disruptive forces in US telecoms, although few analysts agree, arguing that Sprint must now pick from a menu of radical options. One advantage it has over its rivals is a huge stockpile of spectrum. Large chunks of it are unused and would cost billions of dollars to deploy, but Sprint could sell some to one of the larger companies, most probably Verizon, and use the proceeds to improve its own inferior network.

That might buy it time until the regulatory regime becomes more favourable to a merger with T-Mobile. “We still don’t know if the regulators would allow it, but it’s easier to imagine it might be allowed if Sprint were insolvent or close to it,” says Mr Moffett. Analysts say a combination of Sprint and T-Mobile makes more sense than one of Dish and T-Mobile, because a merger of telecoms groups would generate more savings.
For Mr Son, perhaps the biggest irony is that his fate lies in the hands of Mr Ergen, the man he beat in the battle to take over Sprint. Many are suspicious of Mr Ergen’s intentions, suggesting he is talking up a deal with T-Mobile to flush out an offer for his own company from Verizon. If that were the case, it could leave the path clear for Mr Son to have another shot at T-Mobile in a few years.
“Dish is really the linchpin at the moment,” says Mr Stalam. “Mr Ergen’s domino has to be the first one to fall.”

FT : Europe’s biggest business group rejects pan-European tax system

Europe’s biggest business group rejects pan-European tax system

Europe’s biggest business lobby group has withdrawn its support from a pan-European tax system at the heart of a planned crackdown on corporate tax avoidance.
BusinessEurope said plans for a “common consolidated corporate tax base” (CCCTB) no longer carried its backing after the European Commission said multinationals would be forced to sign up to the measure.

Pierre Moscovici, a commissioner, said the plans unveiled in Brussels on Wednesday laid the foundation for a new approach to corporate taxation in the EU. He said: “Corporate taxation in the EU needs radical reform.”
But some campaigners and politicians said the proposals did not go far enough. Oxfam, the charity, said: “These watered down, vague plans are a wasted opportunity by the European Commission to really tackle corporate tax dodging.”
The commission described its proposals to overhaul corporate taxation in Europe as “ambitious yet realistic.” As well as the proposed CCCTB, it launched a consultation over whether more corporate tax information should be made public.
It also published a list of the 30 tax havens that appeared most often on EU blacklists, which it described as “an important first step towards creating a more cohesive EU strategy towards non-co-operative tax jurisdictions”.
The commission said it would take a step-by-step approach to introducing the CCCTB under which member states would be asked to agree a common tax base before introducing consolidation as a second step. The delay in introducing the consolidated element of the plan is a recognition of the difficulty in negotiating a formula that could be used to divide up corporate profits between countries.
Emma Marcegaglia, president of BusinessEurope, said: “We have always been clear that to maintain the support of the business community, the CCCTB must both be optional for companies and encourage them to expand into new markets within the EU by allowing consolidation of profit and losses in different EU member states.”
The commission said that earlier proposals for a CCCTB were optional for companies as the main focus was on simplifying the tax system. But since then, the CCCTB’s potential as an anti-avoidance tool that would eliminate the mismatches and loopholes between national systems had been more widely recognised, resulting in a need to make it mandatory.
The launch of the commission’s action plan coincided with the publication of a report on Walmart, the retailer, by Americans for Tax Fairness, a US campaign group. It called on Brussels to investigate whether Walmart had received tax benefits in Luxembourg that constituted illegal state aid, after calculating that it paid less than 1 per cent in tax to Luxembourg on $1.3bn of profits between 2010 and 2013. The company did not immediately respond to a request for comment.
Molly Scott Cato, a Green member of the European parliament, said that the report showed the importance of EU moves to close tax loopholes. “While Walmart dodge billions worth in taxes, governments struggle to fund the basics needed for a civilised society such as education and healthcare,” she said.
Philippe Lamberts, another Green MEP, said the UK and Ireland were doing their best to sap the commission’s resolve on the CCCTB. The UK has already said it did not intend to take part.
Chas Roy-Chowdhury, head of taxation at ACCA, an accountancy body, said it was optimistic to describe the CCCTB as a “holistic solution” to profit shifting.

>>> Fed Chair Yellen: Have to be cautious about starting too early or too late o

Fed Chair Yellen: Have to be cautious about starting too early or too late on liftoff - Q&A 
- most important positive of rate hike would be the signal that US economy has made great progress, hopeful that would increase confidence
- Reiterates timing of first rate hike is less than important than overall trajectory of rate policy over time
- Committee will look at a wide variety of data in making decision on when lift off is appropriate; there is no simple formula; reiterates still looking for more progress on labor market and there has been some progress on inflation
- USD has largely stabilized. Have seen an appreciable increase in the dollar since last summer, its had a negative effect on net exports and been something of a drag on the economy and that drag will continue for some time
- reiterates there is no plan to conduct any mechanical approach on rates, unclear what 'problem' at the Federal Reserve Congress would be trying to fix
- Have not made any new decisions on timing of when balance sheet reinvestment policy will change, beyond what we have previously said in that it will change after the process of normalizing policy begins.
- Dot chart clearly demonstrates most FOMC participants expect rates to start rising this year if our economic forecast holds
- Reiterates no decision made on timing of liftoff; Data could justify a hike this year.
- IMF plays a useful role in review economic policies of all its members; New data has emerged since IMF comments (**Recall last week IMF urged FOMC to hold rates unchanged until 2016)
- Hard to predict market reaction to Fed decision; uncertainty in the market about long term rates does not appear to be unusually high; will do what we can to minimize needless volatility
- Sees unusually large elements of slack outside jobless rate; There are some tenative signs wage growth is picking up.
- Increase in housing prices is helping restore wealth for many people for whom their home is their major investment asset. Credit availability for mortgages remains quite constrained. 
- Sees potential disruptions in European and global economy if Greece does not reach agreement with creditors; US has little exposure.
- Data in recent weeks suggests consumer spending is growing at a moderate pace; car sales were very strong, in part payback from weaker sales in winter months.
- Not convinced that we have seen response to the drop in oil prices improving household finance (Decline in oil prices represents about $700 per household).

WSJ : Private Equity Hunts for Oil Deals Outside U.S.

Private Equity Hunts for Oil Deals Outside U.S.

Funds that profited from North American energy deals are now looking almost everywhere else

LONDON—Private-equity funds that once profited from energy deals in North American shale are hunting in a new bargain basement for cut-price oil-and-gas fields: almost everywhere else.

Flush with cash from recent fundraising, the groups are looking for assets with owners who have been hurt by the precipitous fall in oil prices—from the North Sea to Nigeria, South America to Southeast Asia. Their previous success in North America—where unconventional oil drilling has led to a boom—has stoked demand from investors, such as pension funds, endowments and insurance companies.

“The fall in the oil price has given us opportunities to buy larger assets and larger companies,” said Marcel van Poecke, a managing director for Carlyle International Energy Partners, or CIEP. “The next two years are obviously a very good investment period,” he said.

The activity comes after the sharp decline in oil prices from last summer’s peaks of around $114 a barrel to lows of under $50 in January, making assets significantly cheaper across the board. With their share prices falling with the price of oil, smaller companies have had a tough time refinancing debt and raising much-needed capital to carry on drilling, providing an opening for private-equity firms to move in.

“Cash is king. Equity markets are closed to oil and gas companies,” said Darren Spalding, a London-based energy lawyer and partner at Bracewell & Giuliani, speaking about U.K. financing.

Mr. van Poecke is one of a wave of private-equity bosses looking to invest outside North America. Carlyle said in March that investors had committed $2.5 billion to its first international energy fund, the biggest first-time raise in its history, giving the group over $10 billion to invest in energy.

CIEP is now on the hunt for upstream assets in the North Sea, and producing fields in Nigeria or Southeast Asia, Mr. van Poecke said. It is also evaluating oil-field services companies that have been at the sharp end of the oil-price swoon, he said.

Sam Laidlaw, former CEO of U.K. energy company Centrica PLC, has been tapped to head a new $5 billion oil-and-gas investment vehicle backed by private-equity firms Carlyle Group and CVC Capital Partners. The fund—Neptune Oil & Gas Ltd.—will focus on large-scale opportunities in the North Sea, North Africa and southeast Asia.

In January, KKR appointed Haroun van Hövell as head of its energy team, part of the group’s plans to build that group outside of the U.S. Blackstone’s Mustafa Siddiqui moved to London from New York last year to lead the firm’s energy activities in Europe, the Middle East and Africa. Blackstone has around $8 billion to spend on energy deals globally.

Blackstone Energy Partners and Blue Water Energy have already invested $500 million in Siccar Point Energy, a new U.K.-based oil company focused on the North Sea that aims to build a big position in the region as the larger oil firms, such as France’s Total SA and Royal Dutch Shell PLC, seek to reduce their holdings in the area.

Messrs. Siddiqui and van Hövell declined to comment for this article. Mr. Laidlaw didn’t respond to requests for comment.

The moves come as Royal Dutch Shell’s $70 billion proposed acquisition of BG Group PLC gives buyers and sellers a yardstick to measure other deals against, bankers and lawyers said.

An oil well near Tioga, North Dakota. After profiting from North American energy deals, private-equity firms are now scouring the world for investment opportunities in the oil and gas sector. ENLARGE
An oil well near Tioga, North Dakota. After profiting from North American energy deals, private-equity firms are now
Private equity-backed deals in oil and gas outside North America more than doubled in value in 2014 compared with 2013 to $11.4 billion, according to data provider Preqin. This year, as of June 17, the deal value outside North America is at $3.6 billion.

So far this year, private-equity firms managing buyout and natural resources funds that are focused on oil and gas investment outside of North America have raised $2.5 billion, according to Preqin, more than double the amount raised in 2013 before the oil price fall in the following year.

The firms are looking in particular at the North Sea, a region with aging fields and declining production where the oil price fall has hit hard, making assets cheaper. They have also looked to West Africa, where oil that once went to the U.S. has been pushed out by shale, and South America, East Africa and Asia, where the drop in the oil price has also created opportunities to take over smaller projects.

In May, funds advised by Helios Investment Partners agreed to invest $100 million for a 12.4% stake in Canada-listed Africa Oil Corp, which has assets in Kenya and Ethiopia as well as Somalia.

Simon Eyers, a managing director at Warburg Pincus, which has been a pioneer in energy investing, said the firm’s recently raised $4 billion global energy fund, which closed in October last year, would focus on energy exploration and production across the globe as well as power, services and mining.

But private equity’s success in the international energy sphere hasn’t always been straightforward.

White Rose Energy Ventures LLP, which was partly backed by Riverstone and other partners, failed to find oil off the coast of Angola after drilling two deep water wells last year at a cost of more than $300 million, illustrating the risks of international oil exploration.

Riverstone declined to comment.

>>> Moody's concludes reviews on 20 Spanish banks' ratings Moody's Investors Ser

Moody's concludes reviews on 20 Spanish banks' ratings Moody's Investors Service has today concluded its reviews on the ratings of 20 banks in Spain. 

In light of the new banking methodology, Moody's rating actions generally reflect the following considerations (1) the "Moderate +" macro profile of Spain (Baa2 positive); (2) the improved outlook for banks' core financial fundamentals based on the strengthening operating environment; (3) the protections offered to depositors and senior creditors as assessed by Moody's Advanced Loss Given Failure (LGF) analysis, reflecting the benefit of instrument volume and subordination protecting creditors from losses in the event of resolution; and (4) Moody's view of a decline in the likelihood of government support for all Spanish banks.

Among the rating actions that Moody's has taken on the Spanish banks are the following:
- 12 long-term bank deposit ratings upgraded, one affirmed, five confirmed and two downgraded
- Five short-term bank deposit ratings upgraded, 12 affirmed and three confirmed
- Eight bank senior unsecured debt ratings upgraded, two confirmed and two downgraded
- Two short-term bank senior unsecured debt ratings upgraded and seven affirmed

(ONE) NOKIA: U.S. DEPARTMENT OF JUSTICE PERMITS NOKIA AND ALCATEL-LUCENT TO PROC

BN 06/17 15:01 *NOKIA SEES TRANSACTION CLOSING IN 1H '16
BN 06/17 15:01 *NOKIA: DOJ GRANTED EARLY TERMINATION OF WAITING PERIOD
BN 06/17 15:01 *NOKIA: DOJ GRANTED EARLY TERMINATION
BN 06/17 15:01 *NOKIA: DOJ PERMITS NOKIA AND ALCATEL-LUCENT MERGER TO PROCEED
BN 06/17 15:00 *NOKIA: U.S. DOJ PERMITS NOKIA AND ALCATEL-LUCENT TO PROCEED
BN 06/17 15:00 *NOKIA: U.S. DOJ PERMITS NOKIA, ALCATEL-LUCENT TO PROCEED W/
NOKIA: U.S. DEPARTMENT OF JUSTICE PERMITS NOKIA AND ALCATEL-LUCENT TO PROCEED WITH PROPOSED COMBINATION
2015-06-17 15:00:50.189 GMT

U.S. DEPARTMENT OF JUSTICE PERMITS NOKIA AND ALCATEL-LUCENT TO PROCEED WITH
PROPOSED COMBINATION

Nokia Corporation
June 17, 2015 18:00EEST

Helsinki, June 17 2015 -  Nokia and Alcatel-Lucent today announced that the
United States Department of Justice has granted early termination of the U.S.
antitrust waiting period for the combination of Nokia and Alcatel-Lucent,
permitting the transaction to proceed. Early termination of the U.S. antitrust
waiting period takes us one important step closer to the closing of
the pending transaction.

The parties continue to make good progress with the regulatory approval
processes in the remaining relevant jurisdictions, with the parties having
already obtained antitrust clearances in Brazil and Serbia. Both companies
will continue to cooperate with the remaining authorities to close their
reviews as quickly as possible.

The transaction remains subject to approval by Nokia shareholders, Nokia
holding over 50.00% of the share capital of Alcatel-Lucent on a fully diluted
basis upon completion of the public exchange offer, receipt of other
regulatory approvals and other customary conditions. The transaction is
expected to close in the first half of 2016.

ABOUT NOKIA

Nokia invests in technologies important in a world where billions of devices
are connected. We are focused on three businesses: network infrastructure
software, hardware and services, which we offer through Nokia Networks;
location intelligence, which we provide through HERE; and advanced technology
development and licensing, which we pursue through Nokia Technologies. Each of
these businesses is a leader in its respective field. http://company.nokia.com
ABOUT ALCATEL-LUCENT

Alcatel-Lucent is the leading IP networking, ultra-broadband access and cloud
technology specialist. It is dedicated to making global communications more
innovative, sustainable and accessible for people, businesses and governments
worldwide. Its mission is to invent and deliver trusted networks to help its
customers unleash their value. Every success has its network.

For more information, visit Alcatel-Lucent on: http://www.alcatel-lucent.com,read the latest posts on the Alcatel-Lucent blog
http://www.alcatel-lucent.com/blog and follow the Company on Twitter:
http://twitter.com/Alcatel_Lucent.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements that reflect Nokia's and
Alcatel-Lucent's current expectations and views of future events and
developments. Some of these forward-looking statements can be identified by
terms and phrases such as "expect," "will" and similar expressions. These
forward-looking statements include statements relating to the  expected timing
of closing of the proposed transaction and satisfaction of conditions
precedent, including regulatory conditions. These forward-looking statements
are subject to a number of risks and uncertainties, many of which are beyond
our control, which could cause actual results to differ materially from such
statements. These forward-looking statements are based on our beliefs,
assumptions and expectations of future performance, taking into account the
information currently available to us. These forward-looking statements are
only predictions based upon our current expectations and views of future
events and developments and are subject to risks and uncertainties that are
difficult to predict because they relate to events and depend on circumstances
that will occur in the future. Risks and uncertainties include the ability of
the parties to obtain the necessary regulatory approvals and consummate the
pending transaction.

The forward-looking statements should be read in conjunction with the other
cautionary statements that are included elsewhere, including the Risk Factors
section of the Registration Statement (as defined below), Nokia's and
Alcatel-Lucent's most recent annual reports on Form 20-F, reports furnished on
Form 6-K, and any other documents that Nokia or Alcatel-Lucent have filed with
the SEC. Any forward-looking statements made in this release are qualified in
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that the actual results or developments anticipated by us will be realized or,
even if substantially realized, that they will have the expected consequences
to, or effects on, us or our business or operations. Except as required by
law, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

IMPORTANT ADDITIONAL INFORMATION

This release relates to the proposed public exchange offer by Nokia to
exchange all of common stock and convertible securities issued by
Alcatel-Lucent for new ordinary shares of Nokia. This release is for
informational purposes only and does not constitute an offer to purchase or
exchange, or a solicitation of an offer to sell or exchange, all of common
stock and convertible securities of Alcatel-Lucent, nor is it a substitute for
the Tender Offer Statement on Schedule TO or the Preliminary Prospectus /
Offer to Exchange included in the Registration Statement on Form F-4 (the
"Registration Statement") to be filed by Nokia with the SEC, the Solicitation
/ Recommendation Statement on Schedule 14D-9 to be filed by Alcatel-Lucent
with the SEC, the listing prospectus of Nokia to be filed by Nokia with the
Finnish Financial Supervisory Authority or the offer document (note
d'information) to be filed by Nokia with, and which will be subject to the
review of, the AMF or the response document (note en réponse) to be filed by
Alcatel-Lucent with the AMF (including the letter of transmittal and related
documents and as amended and supplemented from time to time, the "Exchange
Offer Documents"). No offering of securities shall be made in the United
States except by means of a prospectus meeting the requirements of Section 10
of the U.S. Securities Act of 1933. The proposed exchange offer will be made
only through the Exchange Offer Documents.

The making of the proposed exchange offer to specific persons who are
residents in or nationals or citizens of jurisdictions outside France or the
United States or to custodians, nominees or trustees of such persons (the
"Excluded Shareholders") may be made only in accordance with the laws of the
relevant jurisdiction. It is the responsibility of the Excluded Shareholders
wishing to accept an exchange offer to inform themselves of and ensure
compliance with the laws of their respective jurisdictions in relation to the
proposed exchange offer. The Exchange Offer Documents have not yet been filed
with appropriate regulators, including the SEC. The tender offer will be made
only through the Exchange Offer Documents.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE EXCHANGE OFFER DOCUMENTS
AND ALL OTHER RELEVANT DOCUMENTS THAT NOKIA OR ALCATEL-LUCENT HAS FILED OR MAY
FILE WITH THE SEC, AMF, NASDAQ HELSINKI OR FINNISH FINANCIAL SUPERVISORY
AUTHORITY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER
BEFORE MAKING ANY DECISION REGARDING THE PROPOSED EXCHANGE OFFER.

The information contained in this release must not be published, released or
distributed, directly or indirectly, in any jurisdiction where the
publication, release or distribution of such information is restricted by laws
or regulations. Therefore, persons in such jurisdictions into which these
materials are published, released or distributed must inform themselves about
and comply with such laws or regulations. Nokia and Alcatel-Lucent do not
accept any responsibility for any violation by any person of any such
restrictions.

The Exchange Offer Documents and other documents referred to above, if filed
or furnished by Nokia or Alcatel-Lucent with the SEC, as applicable, will be
available free of charge at the SEC's website (www.sec.gov).

Once the public exchange offer has been filed by Nokia and approved by the
AMF, Nokia's offer document (note d'information) and Alcatel's response
document (note en réponse), containing detailed information with regard to the
exchange offer, will be available on the websites of the AMF
(www.amf-france.org), Nokia (www.nokia.com) and Alcatel-Lucent
(www.alcatel-lucent.com).

MICROSITE DETAILS
Further information on the transaction can be found at:
www.newconnectivity.com

MEDIA ENQUIRIES
Brunswick (adviser to Nokia)
Tel: +1 202 393 7337 (U.S.)
Tel: +44 (0)207 404 5959 (U.K.)

Alcatel-Lucent Communications
Simon Poulter, simon.poulter@alcatel-lucent.com
Tel: +33 (0)1 55 14 10 06
Valerie La Gamba, valerie.la_gamba@alcatel-lucent.com
Tel: + 33 (0)1 55 14 15 91