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Is NSN Ready to Be Sold?

Ray Le Maistre
6/14/2013
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Siemens AG is in talks with private equity firms about the sale of the whole of Nokia Siemens Networks (NSN), the mobile broadband systems and managed services joint venture that the German industrial giant co-owns with Nokia Corp., according to a report in The Wall Street Journal. The report, which suggests Siemens would much rather broker the sale of the whole of NSN rather than just its share, values NSN at around US$10 billion. This is the latest in a series of rumors surrounding Siemens's efforts to divorce itself from the telecom equipment sector. The German company has long been focused on other verticals and speculation resurfaces frequently about the future ownership of NSN. (See Might NSN Become NNN?) The private equity sector has been approached before about investing in NSN but didn't bite. But that was in early 2011, when NSN was still grappling with its finances. (See NSN Fails to Find New Investor.) Now, although it still has a lot to do before becoming a consistently profitable outfit, it's in much better shape financially and strategically and has real momentum in the LTE market. (See NSN Maintains Momentum and Has NSN Turned a Corner?) It has even just outlined its technology focus and R&D aspirations for the next seven years. (See NSN Unveils Its 'Technology Vision'.) Investors clearly like the sound of a sale, as Nokia's share price is up 5.8 percent to €2.78 and Siemens' is up 0.5 percent to €79.55. But is private equity ownership the best option for NSN? It's possible that the focus on returns that would be at the forefront of any private equity owner's strategy could negatively impact NSN's regeneration and sow seeds of doubt in the minds of the operators, who will want NSN to continue investing in its mobile broadband, Service Provider Information Technology (SPIT) and services core competencies. In my view, a private equity deal might be appealing for Siemens and Nokia, but it might not be such a good move for NSN or its customers. — Ray Le Maistre, Editor-in-Chief, Light Reading

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eleathegreat
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eleathegreat,
User Rank: Light Beer
6/16/2013 | 4:35:18 PM
re: Is NSN Ready to Be Sold?
I can only see NSN being sold in pieces. The same way Siemens sold it's telecom business units... first was the mobile handset business, then after that, Com.
Gavin Feddef
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Gavin Feddef,
User Rank: Light Beer
6/14/2013 | 10:26:55 PM
re: Is NSN Ready to Be Sold?
Absoltely agree, Ray. NSN has its heart set on private equity and is focussed on that. Much in line with Orit Gadiesh's fabulous "Lessons from Private Equity Any Company Can Use" they've cut and cropped and left a core focus. Unfortunately, along with the headcount cuts, a lot of the vision and visionaries had to go as well. What's left is neat, but incomplete. Having missed the boat to enable their customers to fight off the OTT players by creating a true holistic, Telco 2.0-like world they will be left to cater to the bit pipes by offering bit pipe technology. Is that worth $10 billion? Hardly.
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