Nokia's planned $21.8 billion takeover of fellow telecommunications equipment maker Alcatel-Lucent promises to create a new number two player and serious challenger to market leader Ericsson.
News of "advanced discussions" between Nokia and Alcatel-Lucent first emerged in the form of a brief statement on 14 April, which made no promises on what might eventuate between the two.
Less than 48 hours later, Alcatel-Lucent made a lengthy statement revealing a memorandum of understanding between the pair for a full takeover by Nokia.
If successful, Nokia Corporation will emerge as the newly-combined entity sometime in 2016.
The move makes sense for a number of reasons, according to Neil Osmond, a New Zealand-based research director for analyst firm Gartner.
"At the moment you've got Ericsson with the top market share [in carriage service provider operational technology] followed by Huawei," Osmond told Information Age.
"There is a daylight gap down to Nokia and Alcatel-Lucent. A merger of the two would basically put Nokia and Alcatel-Lucent at number 2, [leapfrogging Huawei]."
Ovum's chief research officer Mark Newman believed Nokia knew exactly what it wanted from its planned buyout of Alcatel-Lucent.
"In deciding whether to enter into advanced discussions it will have taken a long-term view of the size and scale needed to compete with Ericsson, Huawei, and software giants such as HP, Oracle, and IBM," Newman said.
"The acquisition of Alcatel-Lucent's assets will propel Nokia to a tier-1 position and will open doors to much bigger, end-to-end contracts that have largely been exclusive to Ericsson and Huawei."
There was consensus that increased scale would enable a new Nokia to pursue growth in markets such as the United States.
"Nokia Networks gets access to key tier-1 customers in US, which it was lacking, as well as to customers in China through the subsidiary Alcatel-Lucent Shanghai Bell," analyst firm Analysys Mason said in a statement.
Osmond agreed: "The combined capability as a whole would give Nokia a very good footprint in the US market, in the mobile and fixed space, which it lacks."
New growth markets
Aside from merging two companies famed for their contributions to mobile (Nokia) and fixed (Alcatel-Lucent) networks, and their respective R&D operations, the buyout also offers Nokia some more cutting-edge capabilities and expertise.
In particular, Alcatel-Lucent's strengths in network functions virtualisation (NFV) and small cell technology are likely to have proven attractive to Nokia.
"It would not be lost on Nokia that - particularly if they want to open the door into the US market - they would need to have those kind of capabilities in small cells and network virtualisation," Osmond said.
"Alcatel-Lucent has been aggressive in areas where Nokia is perceived to be lagging behind competition," Newman added.