Light Reading
Nokia and Alcatel-Lucent discount any return of 'vendor financing' practices

Vendor Financing Not in the Cards

Ray Le Maistre
10/16/2008
50%
50%

Times might be tough, but there's no way that Nokia Corp. (NYSE: NOK) would contemplate reintroducing any vendor financing practices to help out cash-strapped customers, noted the vendor's CFO Rick Simonson during today's third-quarter earnings conference call. (See Nokia Reports Q3 and Nokia Siemens Shrinks in Q3.)

"I am not a bank," he stated, with some pride, in response to analyst questions about potential aid to carrier customers and channel partners.

Simonson noted that he was hired seven years ago at Nokia to "unwind the vendor financing" that had built up around network infrastructure deals, and he added that Nokia "won't go back to that model."

The CFO also noted that network operators are in a "situation where they have been in rude health [for a few years, with] envious EBITDA margins and good cash positions. Most operators are in pretty good shape." (See Optimism at Telefónica for example.)

That's not to say that Nokia isn't on its toes about the current macroeconomic climate. "We have our eyes wide open to what is happening out there," stated Nokia's CEO Olli-Pekka Kallasvuo. "We are doing our financial planning for next year and will be appropriately prudent" around operating expenditure, added the CEO.

Alcatel-Lucent (NYSE: ALU) is another company that's monitoring the impact of the global economic situation, but it too sees no return to the days of vendor financing.

Answering questions from Light Reading recently, the head of the vendor's Carrier Business Group, Michel Rahier, said, "It's no longer the same as 2000 or 2001 when we were financing deals -- no one is in that business anymore. But in a certain number of markets there are certain cashflow scenarios," where business processes might be slowed down by macroeconomic pressures.

AlcaLu reports its third-quarter numbers, the first for CEO Ben Verwaayen, on October 30.

— Ray Le Maistre, International News Editor, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 3:29:23 PM
re: Vendor Financing Not in the Cards
well, at least they learned one thing from the last crash.

Or at least they say they did. Maybe there's room for some practice equally shady and equally dicey to emerge.
Mostly Harmless
50%
50%
Mostly Harmless,
User Rank: Light Beer
12/5/2012 | 3:29:21 PM
re: Vendor Financing Not in the Cards
They often seem to use a VF model - especially for new customers.

Most experienced people know that VF makes about as much sense as a sub-prime mortgage. But if one vendor starts to use VF, it places huge pressure on all the other vendors. That's how the VF fiasco started 10 years ago. Herd mentality.

Today the herd is scared of VF because it bit them badly in the past. But Huawei doesn't have the same financial responsabilities as its competitors. They play by a different rule book.
DNA-Lorrd
50%
50%
DNA-Lorrd,
User Rank: Light Beer
12/5/2012 | 3:29:15 PM
re: Vendor Financing Not in the Cards
I agree, ten years ago financing was relatively easy to come buy. Today the financial markets are pretty much frozen because of the credit crisis. Indeed, that may not apply to Huawei. I doubt Alcatel-Lucent, Nortel etc. would be able to get financing deals done. Huawei/Chinese, with backing from the Chinese government, would be the only ones.
acohn
50%
50%
acohn,
User Rank: Light Sabre
12/5/2012 | 3:28:18 PM
re: Vendor Financing Not in the Cards
And dont forget the foreign corrupt practices act that Huawei need not worry about.

Kids Poppy has new laptops for everyone.
Flash Poll
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Today's Cartoon
Hot Topics
Level 3 Does Big Data Differently
Carol Wilson, Editor-at-large, 8/21/2014
IoT Alert: Samsung Snaps Up SmartThings
Mari Silbey, Independent Technology Editor, 8/15/2014
Comcast Streams Back to School
Mari Silbey, Independent Technology Editor, 8/21/2014
Line-Powered Phone Lines: A Hot Topic Again
Carol Wilson, Editor-at-large, 8/20/2014
Analyst: Ericsson, Oracle Top Shrinking SDP World
Carol Wilson, Editor-at-large, 8/19/2014
Like Us on Facebook
Twitter Feed