Telecom Lead Germany: Is Siemens exiting from Nokia Siemens Networks, mobile broadband solutions provider?
Nokia Siemens Networks is the 50:50 joint venture between phone major Nokia and Siemens.
Siemens and Nokia will be free to take action regarding their stake in Nokia Siemens Networks in April 2013 when a six-year shareholder agreement expires.
Financial Times reported that Siemens will speed up efforts to exit or cut its 50 percent stake in its telecom equipment joint venture.
Siemens may look to cut its stake in the venture to below 20 percent.
Siemens would ideally like a private equity investor or a consortium with a solid record in technology to take a controlling stake in NSN, citing a person close to Siemens.
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Nokia Siemens Networks is looking for funds. Siemens’ exit will be significant if NSN can find a strong partner.
In Q4 2012, Nokia Siemens Networks has posted 5 percent increase in revenue at €3.988 billion against €3.815 billion in Q4 2011. The Asia Pacific region clocked higher sales during Q4.
Siemens’ plan for a possible exist is shaping up at a time when Nokia Siemens Networks started the journey to recover.
Nokia Siemens Networks expects non-IFRS operating margin in the first quarter 2013 to be approximately positive 3 percent. The company targets to reduce its non-IFRS annualized operating expenses and production overheads by more than EUR 1 billion by the end of 2013, compared to the end of 2011. Nokia Siemens Networks previous target was to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.
Despite aggressive efforts by NSN — according to Dell’Oro Group — Ericsson achieved top ranking in the Wireless Packet Core market by revenue in Q4 2012.
NSN, which is positioning as the exclusive mobile broadband solutions provider, faces pressure from Ericsson. Technology Business Research says Latin America will fuel growth in Networks in 2013 as Ericsson has secured 50 percent market share in the region for LTE deployments.
According to Michael Soper, Networking & Mobility Research Analyst, Technology Business Research, Ericsson was able to stabilize the Networks unit with 6 percent year-to-year growth and flat margins compared to Q4 2011 thanks to LTE build outs in North America.
Ericsson is reducing headcount in high-cost markets, selling non-core assets and monetizing patents to avoid the pitfalls experienced by NSN and Alcatel-Lucent.
NSN is currently in the process of divesting non-core businesses and reducing headcount by more than 17,000. There were media reports suggesting Alcatel-Lucent would consider a merger with NSN.