Vendor Financing Not in the Cards
"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