Nokia is having a hard time in the fiercely competitive telecom industry

Foreign media reported a few days ago that the company's performance has been in trouble due to fierce competition in the telecommunications industry. In order to get out of this situation, the Finnish network equipment manufacturer is exploring various options such as selling assets. Influenced by this news, Nokia's stock price rose sharply on Wednesday.

A person familiar with the matter said Nokia is discussing with advisers and considering various strategic options, including potential asset sales and business mergers, but the specific details are still under discussion and it is uncertain what decision Nokia will ultimately make.

Some analysts pointed out that given its market position in the telecommunications industry, if Nokia is really exploring strategic options, the only viable options are technology companies with little business overlap or selling assets.

Nokia declined to comment.

In addition to selling assets, Nokia could also consider merging its business with rivals such as Ericsson or cooperating in certain areas, the report said, but such a move would still face significant regulatory hurdles.

In fact, before the news that Nokia was exploring strategic asset sales or mergers, the company's stock price had fallen by about a third over the past year due to poor earnings. But a few hours after the news came out, the company's stock price surged on Wednesday, closing up 6.1% at $4.15. Nokia's current market value is about $23.5 billion.

In the past decade, the mobile telecommunications network industry has undergone large-scale integration. Nokia, which has acquired Siemens and Alcatel-Lucent, has become one of the three major players in the field. Currently, Nokia is competing fiercely with Ericsson and Huawei for 5G market share. As of November 2019, Nokia has signed 63 commercial 5G contracts worldwide.

But Nokia, which has signed public 5G agreements with operators such as T-Mobile, Telia and SoftBank, has become somewhat "powerless" due to its poor performance. It is understood that Nokia had significantly lowered its profit expectations for that year and 2020 in October last year and suspended dividend distribution, saying that profits would face pressure as the company increased its investment in 5G technology.