Shake-Up In 4G LTE Market Creates Long-term Investment Opportunies: Verizon Communications Inc. (VZ)

Nokia Siemens Networks in the spotlight

Nokia Siemens Networks or NSN, a joint venture between Nokia Corporation (ADR) (NYSE:NOK) and Siemens AG (ADR) (NYSE:SI), is a multinational data networking and telecommunications equipment company. Nokia Siemens Networks had been turning around and achieving the largest increase for LTE market share in recent quarters. However, talks to end the six-year-old venture between Nokia and Siemens have intensified. Discussions have accelerated as a shareholder agreement comes up for renewal in April. There are two possible options: The first one is a 100% buyout by Nokia, as Siemens has repeatedly said it wants to get out the venture. However, Nokia has been preserving capital by suspending its dividend, and it may not be the best cash allocation for Nokia, at least in the short term, to acquire the remaining stake while NSN has an enterprise value of as much as $13.4B. The second option is to get Alcatel-Lucent involved. However, Alcatel-Lucent is having its own troubles, as the company just reported a $1.83B net loss in Q4, following a hefty impairment charge. Additionally, Alcatel-Lucent’s CEO, Ben Verwaayen, announced his resignation. Nokia Siemens Networks will continue to be in the spotlight at least until the upcoming shareholder agreement is settled.

Bottom line

In short, despite the recent shake-up, LTE will definitely be booming for the next few years. Investors can start to review and establish long-term positions. The recent shake-up may provide some good buying opportunities. Conservative investors should consider an investment in a stable company with strong cash flow, such as China Mobile. Aggressive investors might want to invest in turn-around stories, such as Nokia and Sprint Nextel.

The article Shake-Up In 4G LTE Market Creates Long-term Investment Opportunies originally appeared on Fool.com and is written by Nick Chiu.

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