NSN COO Vanishes Into Finnair

The top executive table at Nokia Siemens Networks is set for another change.

Following the recent appointment of a new CEO, the vendor has announced the departure of one of its most senior and experienced managers, chief operating officer Mika Vehviläinen, who will leave at the end of 2009 to become president and CEO of airline operator Finnair. (See Nokia Siemens Replaces Its CEO.)

Some industry watchers believe Vehviläinen coveted the CEO role at NSN, and began looking for other opportunities when that post was handed to Rajeev Suri (another internal candidate). Vehviläinen is quoted in a NSN statement as saying that, following last week's reorganization at NSN, "it was clear to me that the right change for the company and our customers would reduce the role of a dedicated chief operating officer. When Finnair approached me, it seemed like the right opportunity at the right time.” (See Nokia Siemens Revamps, Cuts Jobs.)

So Vehviläinen isn't being replaced, as the vendor's new executive structure doesn't include a COO.

NSN is in something of a state of flux at the moment: The recent restructuring announcement followed a disappointing third-quarter performance –- revenues dipped 21 percent year-on-year, and impairment charges dragged the operating loss down to €1.1 billion ($1.64 billion) -- and Suri is under pressure to pull the company back into profitability. (See No Sign of Recovery for Nokia Siemens.)

He has his work cut out. While NSN is successfully building its professional services business –- almost half its revenues now come from services rather than infrastructure sales -– the company is losing out to its main rivals. In reporting its third quarter, NSN said it expects its market share to "decline by more than previously expected in 2009, compared with 2008." Previously the company had expected a "moderate decline."

The optical equipment sector is just one area where NSN is slipping down the market rankings. According to Ovum Ltd. , the Finnish/German vendor has slipped from fifth to ninth place in the optical vendor rankings (based on quarterly revenues) during the past year. (See Huawei, ZTE Buck Optical Trend.)

Suri could, though, help re-energize NSN with some acquisitions -– maybe starting in the optical market -- as part of the stated new strategy to look for purchases (at the right price) that "enhance the scale of existing product and service business lines and that deepen relationships with key customers." (See Nokia Siemens: Hot for Nortel's MEN?)

But if the CEO goes on a shopping spree, he'll be doing it without Vehviläinen.

— Ray Le Maistre, International News Editor, Light Reading