Finnish telecom device manufacturer Nokia announced its partnership with China Huaxin Post & Telecommunication Economy Development Center.

The joined venture is going to be called Nokia Shanghai Bell that will be established resembling a long-time joint venture between France's Alcatel-Lucent and China Huaxin, which is a state-owned Chinese investment company.

Based on the memorandum of agreement, Nokia said it is expecting to hold 50% plus one share in the new joint venture, with Huaxin having the remaining shares.

The two companies have agreed that there will be "fair value compensation" for the contribution of the relevant assets to the JV, but will have to work out the finer details.

Telecom industry analysts said that China would be the last primary jurisdiction still to approve Nokia's 15.6 billion euros ($17.6 billion) takeover of Alcatel.  The Alcatel-Lucent Shanghai Bell provides end-to-end telecommunication solutions and high-quality services to customers in China and worldwide.

Nokia CEO and President Rajeev Suri said in a statement that, "With this MoU in place, we will...work closely with our new partners to make the case for swift approval of the proposed combination.  We look forward to joining with China Huaxin and ASB to drive innovation for customers in China and to help accelerate the country's shift to an innovation-driven economy".

"We are pleased to have signed this agreement with Nokia, and firmly believe the proposed combination would reinforce our companies' presence in China", said China Huaxin chairman Yuan Xin.

Nordea analyst Sami Sarkamies said the joint venture deal was a promising sign.  "If they have agreed that with a state-backed partner, it likely means that there will be green light coming for the whole (Alcatel) deal.

This new joint venture is conditional on the closing of Nokia's planned partnership with Alcatel-Lucent.  The transaction is expected to close next year and will be patterned to the same thing that Alcatel -Lucent has with China Huaxin.