OSAKA -- Panasonic has apparently reached a basic agreement to sell its cellphone base station business to Finland's Nokia. The Japanese electronics maker, which has been streamlining, wants to further free itself to focus on growth fields.
Among Japanese base station suppliers, the Osaka-based company ranks third, after NEC and Fujitsu. But earnings have taken a hit from stiff competition with overseas rivals, including Nokia and Sweden's Ericsson.
Sources on Saturday told The Nikkei that Panasonic will part with the base station operations of subsidiary Panasonic System Networks, which include wireless control systems for communications equipment. The Tokyo-based unit delivers the equipment to major Japanese wireless carrier NTT Docomo, among others. In fiscal 2013, which ended March, sales came to about 20 billion yen ($197 million), with the company controlling roughly 9% of the domestic market.
Panasonic is expected to exchange a memorandum of understanding with Nokia soon. The two companies will then work out the finer details, including the future of the unit's employees, and finalize a deal. The transaction's value is likely to be in the billions of yen.
The Japanese parent is looking to sell the unit by the end of the current fiscal year through next March. It is keen to slim down and devote itself to promising products for automobiles and homes.
According to MCA, a Tokyo-based mobile industry research company, Japan's base station market was worth about 260 billion yen in fiscal 2013. Nokia is the market leader with a 26% share. Since 2007, the Finnish company has had a partnership with Panasonic to develop products for NTT Docomo's LTE high-speed telecommunications services.
Nokia intends to capitalize on Panasonic's ties with NTT Docomo to further expand its market share in Japan.