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NSN's Future Still up in the Air

Nokia Corp. (NYSE: NOK) and Siemens AG (NYSE: SI; Frankfurt: SIE) may have decided not to accept any of the private equity offers for a stake in their Nokia Networks joint venture, but beyond that, it seems little has been decided.

NSN announced today that the ownership of the company wouldn't be changing and that the "current shareholders are in the best position to further enhance the value of the company." In addition, it stated that it would take "further steps to improve the competitiveness of the company as a standalone entity."

Quite what this means hasn't yet been determined, with NSN's communications team saying they are unable to comment further beyond today's official announcement and referring the media to parent Nokia.

So we called the Finnish giant. A Nokia spokesman tells Light Reading that there are no current plans for any job reductions and "nothing concrete" on any plans for further cash injections into NSN. The parent companies "will look into ways to support NSN," he added.

Is an IPO on the cards perhaps? "It's too early to talk about that. The current focus is on strengthening NSN and improving its efficiencies and profitability," adds the spokesman.

One person close to proceedings says that some clarity on what happens next with NSN will come from Nokia and Siemens during the third quarter (so before the end of September).

It's possible, then, that Nokia may have something to say when it announces its second-quarter financial results on July 21, though that seems a little too soon given the lack of information currently available.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 4:59:29 PM
re: NSN's Future Still up in the Air

Gobsmacked that Nokia and Siemens don't have a ready-made and detailed plan to execute now that they have dismissed the private equity offers... the longer they leave this hanging the worse it wil be for NSN, which has enough on its plate with the integhration of the Moto biz and battling to retain business vs the Chinese vendors.

krishanguru143 12/5/2012 | 4:59:27 PM
re: NSN's Future Still up in the Air



Alcatel and Ericsson are their main competition.  Huawei is a competitor but in some countries, they just cannot get their foot in the door as they have close ties to the Chinese government.  Several acquisitions have been blocked.  So while they are the second largest, as time goes on, it is getting harder and harder for them to attract new business as well as keep their existing clients.  Many carriers are doing huge investments in LTE and swapping a lot of gear out and Huawei is losing some of their existing customers; so they are not keeping what they currently have.

 



Last year the NSA stepped in to block AT&T from buying gear from Huawei.  They didn’t make the cut for Verizon either.  Sprint axed them on the phone side.  It is not isolated to the US either.







PICturethis 12/5/2012 | 4:59:21 PM
re: NSN's Future Still up in the Air

Ian if you think that Alcatel and Ericsson are the main reason that NSN finds itself in this position then you are dead wrong.  Huawei has decimated them on so many levels it is not even funny.  This has nothing to do with technology and everything to do with price.

krishanguru143 12/5/2012 | 4:59:21 PM
re: NSN's Future Still up in the Air



Really, then explain how NSN is NOT getting contracts in countries where the government has blocked the purchase of any gear from Huawei?  Huawei can kill NSN and the others on price, but when the gear cannot be purchased, then is price really a factor?  NSN was odd-man out with AT&T.  They sort of got some business from Verizon, but not a main vendor out of it like Alcatel-Lucent and Ericsson are.

 

If you think that Huawei is the main reason why, then you are dead wrong.  AT&T, Sprint, Verizon and T-Mobile are barred from buying Huawei gear; at least two have tried and they were contacted by the government suggesting that they use a different vendor.  No carrier has tried to push back, they obviously know that if they did, they probably wouldn’t be a carrier for the federal government anymore and states could follow suit as well.  So, the gear could be cheaper, but more expensive in the long-term.




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