Nokia’s Alcatel-Lucent acquisition bid: Lessons for public-private partnership?

Nokia’s Alcatel-Lucent acquisition bid saw progress this week after discussions with the French government boosted the government approvals process.

AFP image blogjpgNokia’s Alcatel-Lucent acquisition process is moving along this week after Nokia’s President and Chief Executive Officer Rajeev Suri met with Emmanuel Macron, France’s Minister of Economy, Industry and Digital Affairs on Wednesday to affirm plans for a robust public-private partnership.

Nokia has pledged to “support the development of the overall telecom ecosystem in France,” and to establish a long-term €100 million investment fund in the country, to primarily target Internet of Things (IoT), cyber-security and software platform enablers. Nokia says it expects to work closely with the French government to become “deeply embedded” in the country’s technology and telecoms ecosystem. This would include playing an active role in the government’s “Industry of the Future” program, funding academic tuition, programs and chairs, placing technology experts in France and continuing Alcatel-Lucent’s involvement in major initiatives such as Pôles de compétitivité Systematic, Cap Digital and Images, and Réseaux.

Why a holistic approach is key for public-private success

A holistic policy and regulatory approach for the telecommunications ecosystem is key to achieving national governments’ goals of increased connectivity, innovation and investment. As policy makers and regulators are faced with greater complexity and cross-sectoral implications of information and communication technology (ICT) regulation – and aim to come to grips with the enormous social and economic disruption that ICTs are bringing in their wake – it is important that the interaction of the ICT sector for stimulating growth in the digital economy alongside other sectors is understood and, wherever possible, managed by policy and regulatory frameworks that take this reality into consideration. Analysis based on the International Telecommunications Union’s (ITU’s) ICT Regulatory Tracker supports this finding and shows that growth in services has happened most rapidly where regulatory enablers have been put in place to leverage latest technologies and innovations. (The ITU’s ICT Regulatory Tracker is a tool to monitor and measure the changes taking place in the telecommunication/ ICT regulatory environment.)

How governments can accelerate ICT growth

Both demand-side and supply-side measures are needed to stimulate the development of the telecom ecosystem and the financing thereof – measures range from those aimed at increasing infrastructure, to measures aimed at increasing digital literacy and the uptake of services. Governments have a range of instruments at their disposal to narrow market gaps or accelerate roll-out of telecommunications, including: market based reforms; mandatory universal service obligations (USOs); cross subsidies; access deficit charges; public private partnerships (PPP); and Universal Service Funds (USF). Instead of playing the market, governments can also make an “in kind” contribution to enhance the development of the telecommunications ecosystem. Universal Access and Service Policies do not live in a silo, though. They need to be carefully crafted together with other policies to reach the vision of connecting the population and enabling ICT development, which today is increasingly recognized as the foundation upon which economic and social development can thrive.

Win-win opportunities

Consistent, forward-looking and well-enforced regulation generally provides a vibrant market and win-win opportunities for both service providers and consumers. However, today, challenges remain for policy makers and regulators given that telecommunications infrastructure and services are still failing to reach those who could benefit most, with Internet access reaching near-saturation in the world’s rich nations but not advancing fast enough to benefit the billions of people living in the developing world, according to the 2015 edition of the Broadband Commission for Sustainable Development 2015 State of Broadband report.

Image credit: AFP

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