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Managed Services

NSN Opens Up (a Little)

Nokia Siemens Networks generated €6.93 billion (US$9 billion), nearly 52 percent of its total revenues, from its professional and managed services in 2012, the vendor revealed in an annual report Monday (the first time it has published such a beast). Its "Mobile Broadband" lines of business (network infrastructure and software) generated €6 billion ($7.8 billion), or 44.9 percent of total revenues, with the remaining 3 percent or so coming from other business lines, including those that were sold. NSN will want to do everything possible to increase its Mobile Broadband revenues, as they deliver much better margins. In 2012, the operating margin (before one-time costs) associated with the infrastructure/software sales was 8.1 percent, a dramatic improvement from 2011's 3.4 percent. The 2012 operating margin from services, however, was much lower, at 4.8 percent, though again this was better than the year before (3.4 percent). NSN is in bullish mood since it ended 2012 with improving margins and it's expecting 2013 to prove it has positive momentum. (See Has NSN Turned a Corner? and NSN: This RAN Ain't Big Enough for All of Us.) The publication of an annual report suggests NSN is not only more comfortable with revealing more details about its operations -- it has been hiding behind the skirts of parent Nokia Corp. to date -- but also that it's still on course to become an independent entity in charge of its own destiny. That independence will only come, of course, once it has a string of positive quarters under its belt and potential investors feel confident about the company's future: A further step was take down that road today by the move to sell €600 million ($778 million) of bonds in an effort to restructure some of its debt. If NSN sees plenty of demand for those bonds, its parents, Nokia and Siemens AG, might feel able to accelerate plans for NSN's independence ahead of the shareholders' scheduled renewal of their joint venture agreement in April, six years after the company was formed. — Ray Le Maistre, International Managing Editor, Light Reading

Gabriel Brown 3/19/2013 | 11:52:46 AM
re: NSN Opens Up (a Little) Re: "NSN has been hiding behind the skirts of parent Nokia Corp." << good line

I've long argued that NSN would be better off as an independent company.
Ray Le Maistre 3/19/2013 | 9:12:06 AM
re: NSN Opens Up (a Little) As NSN sells off even more parts of the business -- the deals to sell the optical biz to Marlin and BSS to Redknee are still to be finalized -- so services looks like it will become an even bigger part of the business... It's going to be a fine balancing act, involving reduced costs, to keep the margins going upwards across the business, but if NSN can achieve that through 2013 then it stands a good chance of making it through to the other side...
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