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Nokia Completes The Sale Of Its IP Video Business

Nokia has just completed the sale of its IP video business to the Canadian Volaris Group where the technology and the media business will continue life within a “pure play streaming technology company, Velocix.” Nokia says the money raised will go to lower its debt. Terms were not disclosed.

Nokia is divesting pretty much its full video product portfolio: the caching and streaming products, storage technology, and stream personalization software will all form an independent business within Volaris Group’s Communications & Media portfolio.

This is not news: the divestment was announced in September but it’s worth taking a moment to digest Nokia’s business model adjustment here. Like its major rival, Ericsson, Nokia has effectively trimmed its ambition and abandoned ideas of becoming a major and lead supplier of video kit and accompanying applications to both telco customers and ‘adjacencies’ .

Yes, Nokia is going to stay in the game with a minority shareholding and it will “become a Global Channel Partner for Velocix, enabling [Nokia] to continue to sell and support Velocix video solutions (to Sky for instance, which is an existing customer).”

Nokia will also keep bits of the video unit and the existing integration business to support existing customers, but there’s no disguising that it’s a retreat and a major one. Video and its various associated applications (AR/VR, for instance) are, by all surveys and projections, the dominant and growing traffic type on the internet and with 5G arriving on the horizon, will become ever more dominant.

Surely the telcos will be able to claim a big slice of the video streaming infrastructure pie?  And with that ambition the likes of Nokia and Ericsson could play a supporting technology role?

It appears not. The opportunity is presumably being –  or about to be – snatched by the Web-scalers. Along with ‘Cloud’, where AT&T has just announced a similar retreat (see – AT&T closes sale of data center colocation operations and assets to Brookfield Infrastructure). Video looks as though it’s been either tackled too late, in the wrong way,  or with not enough push behind it. Perhaps a mixture of all three.

And it’s not as if Nokia, via its Alcatel assets, hadn’t been full of optimism just a year or two ago. In April 2017 it was demonstrating “skim storage” said to allow TV and video providers to serve programming to time-shifted viewers more effectively with lower broadcast lag. That followed hot on the heels of an announcement that it was providing Velocix CDN to Sky “to temporarily cache content closer to customers in localized cloud data centers to reduce transportation costs and improve the customer experience.”

Further back, in 2016, it had high hopes for virtual reality and was producing applications to complement its OZO VR camera, including live VR broadcasting, 3D stitching, and a VR player software development kit (SDK).

Taken together its activities shouted one thing: networked video was where it was at and Nokia and its assets were going to play a winning game. Nokia may have another strategy for video streaming support up its sleeve, but that looks unlikely in the immediate term.  In the meantime Nokia needs to husband its resources and narrow its efforts to concentrate on getting a good slice of the 5G market as telcos up their spend.― Telecom TV

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