Europe Clears Nokia’s $2.3bn Infinera AI Takeover

The European Commission has given the green light to Nokia's acquisition of US competitor Infinera for $2.3 billion, just in time before the deal is expected to be finalized. This move will result in the creation of a powerhouse in the optical networking sector, with a combined revenue exceeding $3.6 billion. Both Nokia and Infinera are renowned for their optical transport equipment, which is crucial for transmitting data through optical fiber cables.

By acquiring Infinera, Nokia is venturing into the rapidly expanding AI data center market. Earlier this year, Nokia divested its submarine cable business, which it had acquired through Alcatel, to the French government. The appointment of a new CEO from Intel's AI division further underscores Nokia's strategic shift towards cutting-edge technologies.

Infinera's expertise lies in its optical semiconductor fab located in Sunnyvale, California, where it utilizes indium phosphide (InP) to manufacture photonic integrated circuits (PICs). These advanced chips incorporate various components such as tuneable lasers, optical amplifiers, modulators, and detectors onto a single chip, enabling the development of state-of-the-art coherent optical transceivers.

Recently, Infinera collaborated with US operator Zayo on a successful live network trial using its ICE7 seventh-generation embedded optical engine. This trial showcased the engine's capability to achieve 1 Tbit/s transmission over a 1,391km link, empowering Zayo to offer a substantial 32 terabits of C-Band capacity between Sacramento and Salt Lake City, with the potential to double the bandwidth to 64 terabits using L-Band.

The ICE7 optical engine, equipped with a 5nm CMOS DSP and high-speed optics, can deliver over 140 Gbaud and support single-wavelength transmission of up to 1.2 Tb/s. Zayo, known for operating one of the largest independent networks in North America spanning 132,000 route miles, has been a key player in testing and implementing cutting-edge optical technologies.

Nokia's President and CEO, Pekka Lundmark, expressed confidence in the strategic alignment of the two companies, emphasizing the synergies in customer base, geographic reach, and technological capabilities. Similarly, Infinera's Senior Vice President, Paul Crann, highlighted the significance of the successful trial in demonstrating the power of ICE7 in meeting the escalating bandwidth demands of network operators while optimizing costs.

The European Commission, in its assessment of the acquisition, recognized the potential of the merged entity to enhance its competitive position in the optical networking sector. The Commission's investigation into the transaction's impact on global and European markets for optical transport equipment revealed moderate combined market shares, with several viable competitors present in these markets.