[qi:003] TheStreet.com is reporting that Nokia Siemens Networks is looking at Tellabs (TLAB) closely, and might offer between $16-to-$18 a share for the Naperville, Ill., company. That would put the total value of the transaction at around $7 billion. The possible deal, which is still just a rumor, fits in with NSN strategy to focus more on the US, wireline and the IPTV markets.
UBS Research notes that the deal values Tellabs higher than some of the recent telco buyouts, but “the strategic value of Tellabs is higher given its large incumbency with Verizon and ATT.” If this deal does happen, we should expect a rapid phase of further consolidation in the telco-gear business. The consolidation amongst the carriers have decreased the opportunities for smaller gear makers, who now have to compete for the same pie with their larger counterparts.