Google in talks to buy Nokia's in-flight broadband | Fin24
 
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Google in talks to buy Nokia's in-flight broadband

Apr 11 2018 21:53
Manuel Baigorri, Bloomberg

London - Google is in talks to acquire Nokia Oyj’s plane broadband business as the Alphabet unit seeks to tap into new services and reach more users by offering in-flight high-speed internet, people familiar with the matter said.

Nokia’s technology could help Google offer a faster alternative to existing Wi-Fi on planes, said the people, who asked not to be identified because the deliberations are private. Talks are advanced and an agreement may be reached soon, the people said.

A final decision hasn’t been taken and the companies could still decide against a deal, the people said. Representatives for Alphabet and Nokia declined to comment.

Nokia’s LTE A2G cellular-based system also creates a direct link between an aircraft and the ground instead of just bouncing the signal off of a satellite, enabling in-cabin high-speed internet services using Wi-Fi, according to its website.

Onboard internet has been a consumer pain point for years, with spotty service and weak bandwidth. Yet travellers often pay handsomely for any connectivity on flights. That’s a business opportunity and also a chance for Google to expand its services.

The move could create a wealthy new competitor to Gogo, an existing provider of in-flight internet service. Shares of Chicago-based Gogo pared gains on Tuesday on news of the Google-Nokia talks, finishing with an advance of 2% to $8.86 in New York, giving the company a market value of $769m. Alphabet rose 1.6% to $1 036.5.

Nokia rose 1.2% to €4.55 as of 10:18 am in Helsinki on Wednesday, bringing the value of the company to €25.6bn. The company, which has been battling a slowdown in spending by cellphone network operators, could benefit from a more diversified product portfolio than Swedish rival Ericsson, analysts at Berenberg said, advising clients to buy Nokia shares.

Nokia technology

While Nokia has been developing its in-flight internet technology, the project is a lesser priority than its work on 5G telecom equipment.

Google’s communications group is exploring ways to spread mobile connectivity as strong internet service is crucial to its search engine, YouTube video service and the ads that generate almost 90% of the company’s revenue.

The business, part of a long-term effort to share wireless spectrum in new ways, oversees existing offerings like the Project Fi wireless business, the Google Voice calling service and a large Wifi network in Starbucks coffee shops.

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