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Optical/IP

Held Up By Its Handsets

Jeepers! If Nokia Corp. (NYSE: NOK) didn't have such a massive wedge of the mobile phone market (see Nokia Extends Handset Share) it would be looking up the financial creek and searching for its paddles.

Adopting the usual corporate spin, Finland's number one pension provider today announced its Q3 outlook (see Nokia Provides Q3 Outlook) with a heavy emphasis on the handset business. All's going well, sales are on the up, the 7650's marvelous, blah blah blah. And revenue guidance is down, but not massively overall, to between €7.1 billion and €7.4 billion instead of the previously mentioned €7.2 billion to €7.6 billion range.

But what's going on down infrastructure alley? Not a lot and a helluva lot, by the looks of things! The Nokia Networks division is having a tough time, it seems. The Q3 figures will see a €300 million writedown on its vendor financing agreements with France Telecom SA's current bete noire MobilCom AG, while the GSM business is taking a heavier knock than expected, with operator capex down even further than expected.

Don't even mention 3G. One analyst has even suggested that Nokia has had to push out a makeshift product (and an ultra-expensive one at that) to bridge the gap while further infrastructure development is completed.

So while it expects to post €500 million from WCDMA equipment sales in Q3, the cost of producing that kit could provide a sharp kick to the bottom line's gonads.

And to top it all off, the days are getting shorter (especially in Espoo). Or are the nights getting longer?

Anyhoo, full Q3 figures are set to be reported on October 17, by which time the Finnish behemoth will have been through its joint 3G photo call (September 26) with Sonera Corp. (Nasdaq: SNRA), which has gotten itself mixed up about the difference between 3G and 2G (see Sonera Confuses 3G With 2G).

All in all, could make for an interesting few weeks...

— Ray Le Maistre, European Editor, Unstrung
www.unstrung.com
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