Nokia receives Chinese nod for sale of mobile phone business to Microsoft

Microsoft today said Chinese regulatory authorities have approved its acquisition of Nokia's mobile phone busines, adding there had been no requestfor it to change its patent practices, Thomson Reuters reports.

The company reached an agreement with Microsoft in September for the sale of its business in a €5.4 billion deal (See: Microsoft to acquire Nokia's handset business for $7.1 bn).

However, the Finnish company continued to retain its patent portfolio, which according to analysts was a promising source of future growth.

According to Nokia it still expected the Microsoft deal to close in April.

"Nokia and Microsoft have now received regulatory approvals from the People's Republic of China, the European Commission, the US Department of Justice and numerous other jurisdictions," Nokia said in a statement.

Nokia shares were up 2.9 per cent to €5.48 following the announcement of the approval.

As a phone maker, Nokia had paid rivals for the use of their technology licences as also charging for its own. Analysts said a newly restructured Nokia would be freer to push up those fees.

Media reports said Google and Samsung had asked Chinese regulators to ensure that the Microsoft deal would not result in higher licensing fees.

However, according to Nokia it had not been accused of unfair practices regarding its patents.

"No authority has challenged Nokia's compliance with its undertakings related to standard-essential patents or requested that Nokia make changes to its licensing programme or royalty terms," it said in the statement.

Meanwhile,a Business Standard blog post said that even as Chinese regulators had given the nod to the company, Nokia continued to face regulatory hurdles in India, owing to tax demands by Indian authorities.

The regulatory approval process had involved a thorough review of Nokia's patent licensing practices by several competition authorities around the world, and no authority has challenged Nokia's compliance with its FRAND undertakings related to standard-essential patents (licensing on fair, reasonable and non-discriminatory terms) or requested that the company make changes to its licensing programme or royalty terms.

However, the fate of Nokia's Sriperumbudur facility, near Chennai continues to be uncertain as the Indian Courts and Tax Departments had attached Nokia India's assets, including the Sripermbudur factory, against a Rs 21,000-crore alleged tax evasion case.

In a recent move, the Tamil Nadu government slapped a Rs2,400 crore tax notice on the company.

The factory, which employs around 8,000 people directly, 60 per cent of them women, and another 21,000 indirectly, was supposed to get transferred to Microsoft along with other assets.