Nokia, which returned to the mobile phone market through a brand licensing deal with Finnish company HMD Global Oy, said the deal would not have any impact on its Chennai plant, which is under a tax dispute.
On Wednesday, Nokia signed an exclusive 10-year licensing deal with Finnish company HMD Global Oy to create Nokia-branded phones and tablets, marking the brand’s return two years after the firm sold its handset business to Microsoft for $7.5 billion deal, amid competition from iPhone and Android devices.
Post its handset business exit, Nokia gets most of its revenue from wireless network equipment and related software and services.
Nokia’s Chennai plant, which was started in 2006, made about 180 million phones at its peak, but operations were suspended and eventually shut due to a Rs. 20,000-crore tax dispute. The plant was kept outside of the Microsoft deal.
Nokia has been looking to sell the plant, but there is asset freeze by the department of revenue and taxation, which needs to be lifted for the sale to happen.
“Our announcement today is separate from the status of the Chennai factory and from other issues related to Nokia’s operations in India,” a Nokia spokesperson said in an email response to queries.
Separately, Microsoft said it is selling its entry-level feature phone assets to FIH Mobile Ltd and HMD Global Oy for $350 million.
FIH Mobile, a subsidiary of Hon Hai/Foxconn Technology Co Ltd, will also acquire Microsoft Mobile Vietnam as part of this deal, Microsoft said.
