The Nokia spokeswoman said the company wouldn't comment on market rumors.
Nokia shares rose 2.5% in early trade. Cisco shares slipped 13 cents Friday to end at $19.30.
Networking giant Cisco, based in San Jose, Calif., has a market capitalization of about $123 billion. Finland's Nokia has a market capitalization of approximately $70.6 billion.
A London-based telecoms analyst said the rumor first surfaced at the 3GSM show in Cannes last February.
He said it's clear that Cisco is looking to buy a firm outside of the U.S. and noted that Nokia Networks makes sense for the group as it seeks to reinforce its position in wireless infrastructure.
A German analyst, however, said he didn't see why Nokia would be willing to sell its networks division as it offers a lot of synergies with its handset-manufacturing business.
In addition, he said Cisco wouldn't benefit from great synergies in acquiring Nokia as a whole because the Finnish group's sales network is very different from Cisco's.
Analysts for Dresdner Kleinwort Wasserstein agreed a Cisco acquisition would hardly produce any desirable synergies. "Customers of Nokia's handsets and mobile networks would soon wonder whether Nokia's prevailing roadmaps would stay on track. Mobile carriers would be reminded that the handset brand is something they sooner or later should control themselves," the broker told clients.
"If infrastructure is what Cisco needs, then there are far cheaper alternatives available," it said.
Dresdner assigned a less than 5% probability to the rumors that Cisco would proceed with a bid.
Last week, Nokia named Olli-Pekka Kallasvuo, the head of its mobile-phones business, as its chief executive in waiting. Kallasvuo is to replace Chief Executive Jorma Ollila in June 2006 after Ollila's contract ends. The 54-year-old Ollila, who has served as CEO for 13 years, will remain non-executive chairman.
While Nokia is the world's largest maker of wireless phones, the company has experienced erosion in profit margins as intense competition forces handset makers to lower prices.
At the same time, Nokia has decided to accelerate efforts to capture market share in large developing markets such as China and India, where the wireless-phone industry is likely to generate the bulk of future growth.
Under Ollila's leadership, Nokia catapulted past U.S.-based Motorola in the late 1990s to become the world's biggest maker of wireless phones, with a roughly one-third market share.
Part of Nokia's strength lay in its ability to discern developing market trends and to design easy-to-use phones with splashy designs.
Yet the company's marketing magic has faltered in recent years, most notably by Nokia's failure to anticipate the demand for foldout, clamshell-style phones. Motorola has also bounced back with snazzy new handsets such as the Razr, a credit-card-thin phone for business users.
Cisco, the No. 1 maker of networking gear, gets more than 40% of its revenue from sales of data network switches and about 25% from Internet router sales. Products such as home-network kits and Cisco's services business comprise the rest.
