& cplSiteName &

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        ADD A COMMENT
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.
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue London
November 10, 2017, The Westin Times Square, New York, NY
November 16, 2017, ExCel Centre, London
November 30, 2017, The Westin Times Square
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
The Revolution Will Be Automated
Steve Saunders, CEO and founder, Light Reading, 10/10/2017
The Big Cable DAA Update
Mari Silbey, Senior Editor, Cable/Video, 10/11/2017
Is US Lurching Back to Monopoly Status?
Carol Wilson, Editor-at-large, 10/16/2017
Telecom Italia Covers 73% of Italy With NB-IoT
Iain Morris, News Editor, 10/13/2017
DT: Brutal Automation Is Only Way to Succeed
Iain Morris, News Editor, 10/10/2017
Animals with Phones
Hunt & Peck Click Here
Giving new meaning to hunt-and-peck typing!
Latest Comment
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed