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 Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
LRTV Huawei Video Resource Center
Huawei's Media Solutions Are Here to Stay

9|19|14   |   4:35   |   (0) comments


The current media revolution requires rapid upgrades in technology. New formats (HD, 3D, 4K etc.) and the subsequent explosion of file sizes demand sophisticated network and storage architecture. Social media and the multiple distribution channels require a robust asset management system. Gartner analyst Venecia Liu speaks about the current technological trends in ...
LRTV Huawei Video Resource Center
Microgenesis on Huawei's Switches

9|19|14   |   3:57   |   (0) comments


Microgenesis is a solutions and system integrator company in the Philippines whose areas of expertise include data centers, networking and security products. In this video, Executive Director Jeffrey Choa talks to us about his customers needs and they benefit from using Huawei switches.
LRTV Huawei Video Resource Center
Network Solutions Help the Philippines Jump Ahead

9|17|14   |   2:59   |   (0) comments


In the past, the Philippines has under-invested in technology. Now, the CEO of Softshell talks about how Huawei products help the Philippines jump ahead as the economy improves.
LRTV Huawei Video Resource Center
VCS Observation for Safer Cities in the Netherlands

9|17|14   |   5:20   |   (0) comments


Holland's VCS Observation has been operating for 22 years. Its main goal is to get cities safer. CEO Wim van Deijzen tells us some of the challenges his company faces and how Huawei is helping to overcome these challenges.
LRTV Huawei Video Resource Center
A Conversation With Serbia's Ministry of Interior

9|17|14   |   4:38   |   (0) comments


At HCC 2014, the Assistant Minister of the Ministry of Interior of the Republic of Serbia talks to us about his projects and corporation with Huawei. Solutions like Safe City and E-Government and services like cloud computing are just some of the areas his department is interested in.
LRTV Huawei Video Resource Center
IHS Analyst Discusses eLTE at CCW 2014

9|10|14   |   7:09   |   (0) comments


Thomas Lynch, associate director of critical communications at IHS Technology, talks about broadband in critical communications.
LRTV Huawei Video Resource Center
TCAA on Huawei eLTE: A Broadband Solution for Mission-Critical Communications

9|10|14   |   2:29   |   (0) comments


At CCW2014 in Singapore, the TCCA's Phil Kidner talks about the importance of broadband data for critical communications.
LRTV Custom TV
Spotlight on Cisco: SDN for Optical Networks

9|8|14   |   9:27   |   (0) comments


Cisco's Greg Nehib talks OpenFlow and more on the 'Software-Defined Networking for Optical Networks' panel at the Big Telecom Event in June 2014.
LRTV Custom TV
Cisco's Evolved Programmable Network (EPN)

9|8|14   |   4:05   |   (0) comments


A look at the various demos Cisco showed at Light Reading's Big Telecom Event highlighting Cisco's EPN innovation and how SDN and NFV technologies are enabling a variety of new services.
LRTV Huawei Video Resource Center
The Future of Ultra-Broadband, With Kevin Kelly (UBBF2014)

9|5|14   |   1:13   |   (1) comment


If you think the technological changes we've seen up to now are astounding, just wait until you see what the future has in store. Discuss upcoming breakthroughs with Kevin Kelly, Founding Executive Editor of Wired Magazine, at the Huawei Ultra-Broadband Forum on September 24.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Mosaik Solutions presents its 2014 maps of the wireless world in the US, including cable WiFi deployments, LTE network expansion and 600MHz auction boundaries.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Photos: Qualcomm Takes Over San Francisco
Sarah Reedy, Senior Editor, 9/19/2014
Exclusive: Microwave Maven Exalt Is Cooked
Dan Jones, Mobile Editor, 9/22/2014
NFV & The Data Center: Top 10 Takeaways
Sarah Reedy, Senior Editor, 9/18/2014
EMC Mulls Merger With HP or Dell – Reports
Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/22/2014
Gigabit Nets Boost GDP, Says FTTH Council
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/23/2014
Like Us on Facebook
Twitter Feed