Credit Suisse’s Achal Sultania, who has Outperform ratings on both Nokia and Alcatel, issued a note late yesterday, before Nokia’s statement, based on the Bloomberg speculation that Nokia might want just the wireless assets, not the whole of Alcatel.He sees good reason for Nokia to want those wireless assets.Acquisition of ALU’s Wireless business may make strategic sense for NOK in our view. We believe that such a potential deal would allow Nokia to significantly improve its presence in the US with AT&T and Verizon (where Ericsson and ALU are key suppliers), with Nokia’s current customers being T-Mobile and more recently Sprint (starting from mid-2014). In addition, it may also propel Nokia from distant #3 player in Wireless RAN globally (at ~15% share) to #2 player behind Ericsson, which enjoys ~35% share (followed by Huawei at 20-25% share, ALU and ZTE at ~10% each). Ending 2014, Nokia already had gross/net cash of Eu7.7bn/Eu5.0bn with another Eu750mn likely to come from converts issued in 2011 (likely conversion later this year). In addition, we believe that Nokia’s Maps business is worth around Eu2.4bn (on 2.0x EV/sales) if that asset were to be divested.Sultania offers his back-of-the envelope on what Nokia should pay just for the wireless assets:How much should NOK pay for ALU’s Wireless? We think Eu2bn to Eu2.5bn. For 2016, we assume Nokia Networks’ revenues at Eu12.0bn with 11.5% OMs, and we value Networks at 1.2x EV/sales implying Eu14.4bn in our SOTP analysis (Figure 1). ALU’s Wireless had sales of Eu4.7bn in 2014 (we estimate with 4% OM loss), and we assume Eu4.8bn/Eu4.5bn of sales for 2015/2016 with 0%/1% OM profits (driven by ongoing restructuring efforts). Assuming this deal were to happen, this would imply Nokia Networks + ALU’s Wireless entity would deliver sales of Eu16.4bn in 2016 with 9% OMs. However, we would argue that a scenario exists that NOK can drive 5% OMs in ALU’s Wireless given synergies around R&D. This would allow combined entity to do sales of Eu16.5bn with 10% OMs, which at 1.0x EV/sales would imply valuation of Eu16.5bn (an increase of Eu2.1bn vs. our existing scenario, Figure 2). In addition, we also believe that Nokia may have to spend Eu250mn on cash restructuring and Eu500mn on swap out of some of ALU’s installed base due to differing technology standards. As such, we believe that Nokia should be willing to pay in the range of Eu2bn to Eu2.5bn for ALU’s Wireless assets (implying 0.45x to 0.55x EV/sales for 2016).